Increase in Apartment Sales Over 2 Years of Occupancy... "Tax-saving Listings to Appear Until June"

1~7 Months in 2018: 17,732 Apartment Sales Transactions... KB Live On Analysis

View of the Yongsan Railroad Maintenance Depot site (behind the riverside apartments) from the 63 Building in Yeouido, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Onyu Lim] The number of apartment sales transactions for units that have been occupied for more than two years has increased. This is analyzed to be due to the rise in tax-saving listings as tax regulations such as capital gains tax have been strengthened.

According to KB Kookmin Bank Real Estate Live On on the 30th, based on actual transaction data from the Ministry of Land, Infrastructure and Transport, the number of apartment sales for '2-year occupancy' apartments (units occupied in 2018 and have passed two years of occupancy) from January to July this year was 17,732. This corresponds to 2.3 times the sales volume of 2-year occupancy apartments (units occupied in 2017) during the same period last year, which was 7,551.

Accordingly, the proportion of 2-year occupancy apartments in the total apartment sales from January to July this year is about 3.9%. This is an increase of 0.7 percentage points compared to the same period last year.

Along with this, 3-year occupancy apartments (units occupied in 2017) also recorded 17,748 transactions from January to July this year, accounting for 3.9% of total sales.

The region with the largest increase in the proportion of 2-year occupancy apartment sales is Chungbuk. It increased by 4.5 percentage points compared to last year, reaching 8.4%. This was followed by Gangwon, Gyeongbuk, Busan, and Gyeonggi.

In terms of transaction volume, Gyeonggi-do saw the largest increase, with a total of 5,943 transactions. This is a 260% increase compared to the same period last year. The top five cities and counties by transaction volume were all in Gyeonggi-do: Gimpo, Hwaseong, Pyeongtaek, Yongin Cheoin-gu, and Osan. These areas had many new large apartment complexes such as the 2nd phase new towns, where the house price increase rate was relatively low.

KB Live On analyzed that the increase in the proportion of 2-year occupancy apartment sales is the result of a complex interplay of increased occupancy volume, rising prices of new apartments, and strengthened tax policies.

First, the number of apartments occupied in 2017-2018, which became 2-year occupancy units last year and this year, is 860,000 nationwide. The nationwide apartment occupancy volume started to increase from 2013, peaking at 400,000 units in 2017 and 460,000 units in 2018. This is the highest figure since 1990.

In addition, coupled with the trend of preference for new apartments, the capital gains were also significant, and tax-saving listings are emerging ahead of the implementation of policies such as increased capital gains tax and comprehensive real estate tax.

For single-homeowners, if the house was acquired in a regulated area after August 3, 2017, capital gains tax exemption benefits apply if the house is lived in and held for two years; for houses acquired before that date and in non-regulated areas, exemption applies if held for two years.

Mi-yoon Lee, a specialist at Kookmin Bank, advised, "There is a high possibility of tax-saving listings appearing until the end of this year and June next year, so those without homes should consider looking for these listings."

This content was produced with the assistance of AI translation services.