Did Multi-Homeowners Keep Only 'One Smart Home'? 80% of Seoul Apartments Sold for 1.5 Billion Won or Less

Strong Demand for Mid- to Low-Priced Homes with Higher Loan Limits
Multi-Homeowners Seem to Have Sold Properties in Outlying Areas Rather Than Gangnam

In the past few months, as the government's temporary suspension of the heavy capital gains tax for owners of multiple homes neared its end, more than 8 out of every 10 apartments traded in Seoul were mid- to low-priced properties worth 1.5 billion won or less. Contrary to the government's intention to regulate high-priced properties in the Gangnam area, owners of multiple homes opted to sell off lower-priced apartments outside Gangnam, where the tax burden was lighter, in order to consolidate their assets into a single, high-quality property.

Yonhap News Agency

According to the Ministry of Land, Infrastructure and Transport's actual transaction price system on May 17, the proportion of apartment sales contracts in Seoul for properties priced at 1.5 billion won or less, reported from February this year—when tax-driven selling began in earnest—until May 16, reached 81.6%. This figure is up 3.4 percentage points from the previous three months (November last year to January this year), when the proportion was 78.2%. In contrast, the share of high-priced apartment transactions dropped across the board, with 13.2% for those priced between 1.5 billion and 2.5 billion won, and 4.7% for those above 2.5 billion won.

Owners Sold in Nowon and Gangseo Before Gangnam... Focus on Reducing Number of Properties

This “mid- and low-priced concentration” is the result of a combination of tax-saving strategies by owners of multiple homes and the government's extremely tight lending regulations. After President Lee Jaemyung announced via social media in January his intention to end the suspension of the heavy capital gains tax, the number of Seoul apartments on the market once surged past 80,000 listings.

However, as transactions of high-priced homes were blocked by restrictions and lending constraints in regulated areas, owners of multiple homes rushed to dispose of properties in outlying districts where the tax burden was lighter. In fact, among properties priced 1.5 billion won or less, the share of those under 600 million won (23.6%) and those between 600 million and 900 million won (28.7%) increased noticeably compared to the previous period.

Notably, in Nowon District—where until early May only those without a home could purchase properties with tenants in place (“gap investments”)—there were 920 contracts in April alone, more than three times the Seoul district average of 290, making it a leading area for transactions. With this focus on mid- and low-priced properties, the average transaction price for Seoul apartments fell to 1.09846 billion won, about 80 million won lower than the previous average of 1.18834 billion won.

With the End of the Tax Suspension, Application Numbers Halved... Market Pauses for Breath

From January 23, when the President mentioned the end of the heavy capital gains tax exemption for owners of multiple homes, until the deadline last weekend, nearly 30,000 (29,655) land transaction permit applications were filed across Seoul’s 25 districts. Nowon recorded the highest number of applications at 3,507, followed by Gangseo (1,975), and Songpa (1,916), while Gangnam (1,341) and Seocho (1,013) ranked lower. This suggests that wealthy homeowners in Gangnam shifted from selling to gifting properties to their children.

After the suspension ended on May 9 and the heavy capital gains tax was reinstated for owners of multiple homes from May 10, the market immediately froze. In Nowon, the daily average number of permit applications, which had been around 35, dropped to the teens by mid-May, while Gangnam fell to single digits. The number of listings also plummeted, dropping by more than 5,000—from about 68,000 on the day the suspension ended to about 63,000 now.

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