Apartment prices in Seoul's Gangnam three districts (Gangnam, Seocho, and Songpa) and Yongsan have fallen for two consecutive weeks as multi-property owners flood the market with distressed sales ahead of the expiration of the capital gains tax surcharge exemption.
According to the Korea Real Estate Board on Wednesday, Seoul apartment prices rose 0.09% this week (as of the 2nd) compared to the previous week, but the rate of increase has declined for five consecutive weeks since late January (0.31%). The average apartment price growth in Seoul has continued to slow for five weeks.
The downward trend is pronounced in the Gangnam area and Yongsan. Prices fell in the order of Songpa (-0.09%), Gangnam (-0.07%), Yongsan (-0.05%), and Seocho (-0.01%).
Actual transactions show sales occurring hundreds of millions of won below previous peaks. A 59-square-meter unit at Park Rio in Sincheon-dong, Songpa, changed hands for 2.185 billion won late last month—615 million won below its record high of 2.8 billion won. A 59-square-meter unit at Raemian Gaepo Lucéheim in Ilwon-dong, Gangnam, recently traded at 2.7 billion won, down 450 million won from its previous high of 3.15 billion won.
The surge in listings is spreading beyond Gangnam to regulated areas across the metropolitan region. Tax-saving properties have been actively released onto the market since President Lee Jae-myung officially announced the end of the capital gains tax surcharge exemption for multi-home owners.
According to real estate platform Asil, apartment listings in Bundang, Seongnam reached 3,575 units, surging 78.5% from 2,002 units on January 23. Dongan, Anyang also increased 65.2% from 1,830 to 3,024 units during the same period. In Seoul, listings along the Han River belt rose sharply in Seongdong (1,212 to 2,132 units, up 75.9%) and Songpa (3,526 to 5,578 units, up 58.1%).
Some observers suggest that if distressed sales continue to increase ahead of the May 9 expiration of the tax surcharge exemption, Seoul apartment price indicators could turn negative. Experts are watching closely whether the correction that began in Gangnam will spread across all of Seoul.
Industry insiders expect the downward movement in apartment prices to become more pronounced starting next week, particularly in Gangnam and Han River belt areas.
This is because administrative processing of land transaction permits applied for since February 12—when the government announced the end of the multi-home owner tax surcharge—will be completed sequentially starting the 10th, following the Lunar New Year and March 1st holidays, leading to formal contracts between buyers and sellers.
Once actual transaction prices of these distressed sales become public, selling sentiment among multi-home owners seeking to avoid the surcharge is expected to intensify, significantly impacting the stabilization of Seoul's apartment market.
