Seoul Apartment Listings Drop Again After Increased Capital Gains Tax; 1,200 Fewer in a Day

65,682 Listings in Seoul on May 11, Down from First Day of Enforcement
Listings Drop Below 70,000 in Less Than Two Months After Peaking at 80,000 in March
End of Pressure to List Properties for Multiple Homeowners
Government Considering Exe

Following the implementation of the increased capital gains tax for owners of multiple homes on May 10, the number of apartment listings in Seoul is expected to continue its decline. The number of Seoul apartment listings, which peaked at around 80,000 at the end of March, fell below the 70,000 mark again in less than two months. This is because the incentive that drove up listings due to tax pressure on multi-homeowners expired last week, and there are now no mechanisms left to encourage further listings. However, the government is considering measures to exempt non-resident single-homeowners from land transaction permit requirements to induce them to put their properties on the market. On May 11, President Lee Jaemyung also posted on his social media, saying, "(For non-resident single-homeowners with tenants), buyers will be limited to those who do not own a home, and they will be allowed to move in only after the existing tenant's remaining lease term ends, with that period not exceeding two years."

According to the real estate big data company Asil on May 11, the number of Seoul apartment listings stood at 65,682 as of this date. This is a decrease of about 1,200 from the previous day (66,914), when the increased capital gains tax took effect. After peaking at 80,080 on March 21, the number of listings fell below 70,000 again in less than two months.

The fluctuation in listings has depended on regulatory measures. With the implementation of the June 27 mortgage regulation last year, which capped home mortgage loans in the Seoul metropolitan area at 600 million won, the number of listings rose to 79,219 on September 20. As the market was shocked and buyers turned cautious, the number of properties for sale increased. However, after the October 15 measures of the same year, when all of Seoul was designated as a land transaction permit zone and gap investment was blocked, the number of tenanted properties for sale dropped sharply. As a result, the number of Seoul apartment listings fell below 70,000 at the end of October, reaching a low of 55,534 on January 5.

The rebound began this January, when the government introduced tax pressure measures for multi-homeowners. After President Lee Jaemyung announced via X (formerly Twitter) on January 23 that the grace period for the increased capital gains tax on multi-homeowners would not be extended, the number of listings, which stood at 56,219 on that day, surpassed 60,000 just two weeks later on February 7 (60,141). As the government provided a window for multi-homeowners to sell without incurring the increased capital gains tax, the pace of listing growth accelerated. By combining regulations and supplementary measures at a time when listings were declining, the government maximized the inducement of properties onto the market.

Experts believe that a further decline in listings is inevitable going forward. They also anticipate rising housing prices as a result. Ham Youngjin, head of the Real Estate Research Lab at Woori Bank, stated, "After May 9, the combination of the capital gains tax burden and rising rental prices will likely result in more listings being locked up and rental prices increasing, especially in Seoul's outer districts, as genuine buyers enter the market and push up asking prices. High-priced homes in the Hangang Belt and Gangnam area are expected to remain firm, with a strong trend anticipated ahead of the tax reform in July."

Given the market trend so far, many expect the government will likely introduce additional targeted regulations to encourage more listings. Since the tax measures are scheduled for late July, there is a need to fill the policy gap of about two months until then. Options being discussed include revising long-term holding special deductions or exemptions from increased capital gains tax to encourage non-resident single-homeowners and registered rental business owners to put their properties on the market.

Additionally, there is talk of giving non-resident single-homeowners the opportunity to sell. Specifically, the exception previously granted to multi-homeowners—allowing the sale of tenanted properties despite the re-imposition of the increased capital gains tax—may also be extended to non-resident single-homeowners. On this day, President Lee responded via X (formerly Twitter) to media reports suggesting that exempting non-resident single-homeowners from land transaction permit requirements is, in effect, permitting gap investment: "The buyer must pay the full purchase price, including the deposit, within the remaining lease period, which cannot exceed two years. Calling this gap investment seems excessive."

Yang Jiyeong, head of Asset Management Consulting at Shinhan Securities, explained, "The government is well aware of the potential for a long-term decline in listings due to supply shortages, so it is highly likely that it will utilize a variety of measures—such as tax, lending, and non-resident single-homeowner policies—to stabilize the market." Yoon Sumin, real estate expert at NH Nonghyup Bank, also stated, "In the future, the government will likely select specific targets, such as registered rental business owners in regulated areas, to induce more listings through targeted regulations. However, as long as the fundamental supply problem remains unresolved, there are limits to how much short-term targeted regulations can change the overall market trend."

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