Increased Listings but Trading Slump Persists

One Day Left Until Temporary Exclusion of Heavy Capital Gains Tax on Multiple Homeowners

[Asia Economy Reporter Kim Min-young] On the eve of the exclusion of the heavy tax rate on capital gains tax for multi-homeowners, the number of apartment listings in Seoul and the metropolitan area is increasing. However, demand to absorb the increased listings is weaker than expected, making it difficult to resolve the transaction freeze. This is because the possibility of additional interest rate hikes and the maintenance of loan regulations make financing difficult. In the market, there is also a forecast that apartment gifts may increase as multi-homeowners who find it difficult to sell may choose the 'burdened gift' option.

According to real estate big data company Asil on the 9th, since the Presidential Transition Committee announced a one-year temporary exclusion of the heavy capital gains tax for multi-homeowners, from April 1 to this day, three metropolitan areas?Seoul, Gyeonggi, and Incheon?ranked within the top five in terms of increased apartment listings. During this period, Incheon listings increased from 22,232 to 24,046, an 8.1% rise, ranking second in increase; Seoul rose from 51,427 to 55,509, a 7.9% increase, ranking third; and Gyeonggi increased from 100,764 to 107,742, a 6.9% rise, ranking fifth. This is analyzed to be because multi-homeowners who want to receive capital gains tax reduction benefits put their properties on the market.

On the other hand, the number of transactions has not increased significantly compared to the rise in listings. According to the Seoul Real Estate Information Plaza, the number of apartment transactions in Seoul in April is currently 985, surpassing February's 810 transactions, when the transaction drought was severe. Considering that the reporting deadline is more than two weeks away, it is possible that the number will exceed March's 1,431 transactions. If so, it would be an increase in transaction volume for two consecutive months. However, compared to April last year (3,655 transactions), the transaction volume is only about one-third, indicating that the transaction slump continues.

Park Won-gap, Senior Real Estate Specialist at KB Kookmin Bank, said, "From the perspective of multi-homeowners, most of the demand to buy their houses comes from gap investors." He added, "Except for small-scale reconstruction with many gap investors, high-priced houses, large apartments, and residential-commercial complex apartments may not be as easy to sell as expected." He explained that the burden of financing has increased due to additional interest rate hikes and the maintenance of loan regulations, and that the 30s generation, which has emerged as the main force in the housing market, is less likely to engage in aggressive borrowing and investing as they did last year.

If the purchase demand does not follow and sales fail, there is a forecast that burdened gifts by multi-homeowners will increase. The burdened gift that multi-homeowners can choose is when parents gift a house to their children with debts such as jeonse deposits or loans attached. Since the debt is transferred to the children, capital gains tax is paid. However, if capital gains tax is reduced for multi-homeowners, the total amount of burdened gifts decreases, so burdened gifts may increase during this period. In fact, the proportion of apartment gifts in Seoul in March accounted for 13.4% of total transactions, marking the highest figure in eight months since July last year (16.4%).

Park said, "Multi-homeowners may first try to sell on the market, and if that is not successful, they may choose burdened gifts as a second option."

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