Due to Interest Rate Hikes and Housing Price Watchfulness... Seoul Apartment Gifts at Lowest in 2 Years and 8 Months

The number of autonomous districts in Seoul where the average apartment sale price exceeds 50 million KRW per 3.3㎡ has more than doubled in one year. As of November last year, only Gangnam-gu, Seocho-gu, and Songpa-gu among the 25 autonomous districts in Seoul had average apartment sale prices exceeding 50 million KRW per 3.3㎡, but last month, Yongsan-gu, Seongdong-gu, Mapo-gu, and Gwangjin-gu were added, making a total of seven districts. The photo shows the view of Seoul apartments from 63 Square. Photo by Kim Hyunmin kimhyun81@

[Asia Economy Reporter Kim Min-young] The proportion of apartment gifts in Seoul has fallen to its lowest level in 2 years and 8 months. It appears that gifts are being postponed due to increased loan interest burdens caused by interest rate hikes and the possibility of further declines in apartment prices.

According to apartment transaction statistics by transaction cause released on the 4th by the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Board, the number of apartment gifts in Seoul in July was 337, accounting for 7.2% of the total apartment transactions in Seoul (4,651 cases).

This is the lowest since November 2019 (6.1%), 2 years and 8 months ago. It is also 4 percentage points lower compared to June (11.2%), the previous month. In contrast, the number of apartment gifts nationwide in the same month was 3,388, accounting for 7.9% of the total transactions (42,595 cases), showing an increase from the previous month (5.2%).

The proportion of apartment gifts in Seoul has been declining for three consecutive months since May. Despite the temporary exclusion of capital gains tax surcharges for multi-homeowners for one year starting May 10, allowing multi-homeowners to pay capital gains tax at the general rate when gifting with burdens, the gifting movement has slowed down.

The proportion of apartment gifts in Seoul rose from 10.2% in January this year to 23.1% in April, and remained relatively high at 17.2% in May. This is interpreted as a choice of gifting over selling homes due to expectations of deregulation in real estate policies following the inauguration of the Yoon Suk-yeol administration.

Among the 25 autonomous districts in Seoul, Jung-gu had the highest gift proportion in July at 36.2%, followed by Jongno-gu at 27.8%. Yongsan-gu decreased from 15.7% in the previous month to 10.7%, and Seongdong-gu sharply dropped from 20.4% to 2.3%.

Seocho-gu, which showed a strong apartment price trend alone until July, saw its gift proportion rise from 13.8% in the previous month to 17.4% in July. In contrast, Gangnam-gu sharply fell from 34.7% to 13.8% during the same period. Songpa-gu, where listings have accumulated and actual transaction prices are declining, saw its gift proportion significantly decrease from 15.4% in June to 4.1% in July.

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