Following the government's August 3 tax reform announcement, the number of apartment listings in Seoul has increased by over 33% in just three months. While transaction volumes have decreased and apartment prices in the Gangnam area have begun to decline, analysts are uncertain whether the rise in listings will lead to price stabilization across the city.
As of November 7, real estate big data firm Asil reported that the number of apartment listings in Seoul reached 80,528, up 20,119 (33.3%) from 60,409 on the day the tax reform was announced.
All 25 districts in Seoul saw an increase in listings during this period. The Gangnam area, which includes Gangnam, Seocho, and Songpa districts, accounted for 38.0% of the total increase, while the remaining 22 districts made up 62.0%.
Despite the increase in listings, transaction volumes have dropped. According to the Korea Real Estate Agency, the number of apartment transactions in Seoul in September was 3,915, a 42.4% decrease from 6,796 in the same month last year.
Price trends varied by region. In the first week of November, the Korea Real Estate Agency reported that apartment prices in Gangnam fell by 0.39% compared to the previous week, while Seocho and Songpa districts saw declines of 0.37% and 0.17%, respectively.
Conversely, the overall apartment prices in Seoul rose by 0.07%. The 22 districts outside of Gangnam maintained an upward trend, indicating that the price adjustments associated with the increase in listings have not spread throughout the city.
Market observers note that during previous periods of tax increases, listings temporarily surged before declining again, leading to an expansion in price increases.
Under the Moon Jae-in administration, the July 10 measures in 2020 raised the highest comprehensive real estate tax rate for multiple homeowners from 3.2% to 6.0% and strengthened capital gains tax rates. The increase in the comprehensive real estate tax rate took effect in 2021, while the enhanced capital gains tax was applied starting June 1 of that year.
At that time, the number of apartment listings in Seoul rose from 40,653 on March 1, 2021, to 48,152 on May 1, marking an 18.4% increase. However, by May 9, listings had decreased to 47,410, and by August 25, they had dropped to 39,084.
As the flow of listings changed, the rate of price increases also expanded. The monthly increase in apartment prices in Seoul fell from 0.67% in February 2021 to 0.43% in April, but then rose again to 0.48% in May and 0.98% in June.
Even during the period of increasing listings, prices did not decline, and the rate of increase strengthened after listings decreased.
Experts believe that a shift in the flow of listings could occur again around next spring. Some multiple homeowners may decide to sell ahead of the June 1 tax assessment date, but properties that do not sell could return to the market.
Park Hap-soo, an adjunct professor at Konkuk University’s Graduate School of Real Estate, predicts that once the tax reform plan is finalized, some listings may emerge between January and March of next year. He noted, "In April, there is a possibility that listings could be withdrawn or prices could rise, indicating a trend similar to that of 2021."
* This article has been translated by AI.
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