All Listings Increase in Seoul's 25 Districts... Highest Number of Sales in 5 Months

Expectations for Deregulation by New Government... More Listings Expected as Capital Gains Tax Exclusion Applies
Loan Regulations and Interest Rate Hikes Still Impactful, Short-Term Recovery in Transactions Anticipated

[Asia Economy Reporter Jo Gang-wook] After the March presidential election, apartment listings increased in all 25 autonomous districts of Seoul. The number of apartment sales transactions also recorded the highest level in the past five months, showing signs of recovery from the prolonged transaction freeze. This is interpreted as a result of growing expectations for the new government's real estate regulation easing policies. Additionally, some multi-homeowners, anticipating that the capital gains tax surcharge exemption will be implemented with the new government’s inauguration on the 10th of next month, are putting their houses on the market in advance.

According to real estate big data company Asil on the 27th, the number of apartment listings in Seoul as of the previous day was 54,809 (excluding duplicates). This is a 10.6% (5,270 listings) increase compared to 49,539 listings on the 10th of last month, right after the presidential election. This is the largest number of listings since August 20, 2020 (54,905 listings). In particular, 3,272 listings appeared after the Presidential Transition Committee officially announced the exemption of the capital gains tax surcharge for multi-homeowners on the 31st of last month, showing a steep increase. This is interpreted as a result of hurried moves to sell before the holding tax calculation date on June 1.

Listings increased in all 25 autonomous districts. By region, the increase in listings was noticeably higher in outer areas such as Nowon, Dobong, and Gangbuk districts (No-Do-Gang) compared to the Gangnam 3 districts after the presidential election. The district with the highest growth rate was Gangbuk-gu, where listings surged 17.5% from 936 to 1,100 after the election. Dobong-gu and Nowon-gu showed increases of 12.8% and 10.8%, respectively. Fourteen districts showed double-digit growth rates during this period. In contrast, the increase in listings in Gangnam-gu and Seocho-gu after the election was only 5.4% (219 listings) and 6.2% (235 listings), respectively, about half the average for all of Seoul. However, even within the Gangnam 3 districts, Songpa-gu saw a 15.5% increase from 3,039 to 3,511 listings during the same period. The market views this as a continuation of the preference for a single, well-located home, with listings increasing more in outer areas like No-Do-Gang than in Gangnam or Seocho. Some analyses suggest that multi-homeowners are clearing listings in outer areas and aiming to move to popular areas such as Gangnam and Seocho. This is interpreted as a move to upgrade to higher-tier areas amid growing expectations for rising house prices ahead of the real estate market deregulation that will begin in earnest after the inauguration of the Yoon Seok-yeol government.

Apartment sales transactions are also showing a clear recovery trend. According to the Seoul Metropolitan Government’s Real Estate Information Plaza, as of the 26th, the number of apartment sales in March was 1,401, a sharp increase of over 73% (592 transactions) compared to February’s 809 transactions. After seven consecutive months of decline from August last year (4,064 transactions) through February this year, it turned to an increase for the first time in eight months. February’s apartment sales in Seoul fell below 1,000 for the first time since monthly statistics began in 2006, marking a bottom, and the rebound following the presidential election is the highest level in the past five months. Although the 30-day registration reporting period after contracts has not yet ended, the record of 1,361 transactions in November last year has already been surpassed. As buyer sentiment rises and transactions become active, Seoul apartment prices have stopped falling and have remained stable for three consecutive weeks.

However, while expectations for the new government’s pledges are growing, there are also forecasts that the recovery in transactions may be short-lived due to ongoing impacts from loan regulations and interest rate hikes. Recently, the Transition Committee hinted at a slowdown in easing regulations, making it difficult to view this as a clear signal of a full-scale recovery in buying demand. Ultimately, it is analyzed that until actual confirmed policies are announced after the next government takes office, tendencies to adjust the timing of purchases will continue.

Kim Hyo-seon, Senior Real Estate Officer at NH Nonghyup Bank, said, "The movement of multi-homeowners trying to sell using the capital gains tax surcharge exemption period is expected to intensify," but added, "However, the majority of listings will be non-Gangnam areas and non-reconstruction properties rather than prime locations or redevelopment project targets, and it will be difficult for transactions to be very active amid loan regulations and rising interest rate atmosphere."

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