Last-minute property transactions are surging in Seoul as the deadline approaches for the expiration of the capital gains tax moratorium on multi-home owners. Land transaction permit applications topped 900 in a single day, reflecting a concentrated push by sellers seeking to minimize tax burdens. While some observers expect listings and transactions to contract once the heavier tax takes effect, a government review of policies for non-resident single-home owners has emerged as a key variable for the market's future direction.
According to the Saeol e-government portal on Tuesday, Seoul's land transaction permit applications in May totaled 919 as of the previous day. Accounting for the holiday period, the figure effectively represents filings received on May 4 alone. This is roughly double April's daily average of 462 applications.
Seoul's land transaction permit requests have been on a steady upward trend in recent months, rising from 5,138 in February to 8,550 in March and 10,165 in April. Initially, multi-home owners needed to complete both permit applications and contract procedures by mid-April to avoid the capital gains tax hike, which caused applications to taper off late last month. However, after the government announced that filing a land transaction permit application by May 9 would be sufficient to qualify for exemption from the heavier tax, homeowners who had been weighing whether to sell reportedly returned to the market.
By district, applications were concentrated in areas with clusters of mid- to low-priced apartments. Nowon-gu led with 102 filings, followed by Songpa-gu (60), Guro-gu (55), Eunpyeong-gu (52) and Gangseo-gu (51).
As transactions pick up, the number of listings remaining on the market is shrinking rapidly. According to property big data firm Asil, Seoul apartment listings stood at 70,133 as of Tuesday, down approximately 10,000 units, or 12.42%, from 80,080 on March 21. New listings remain limited while existing listings with price reductions are being sold quickly, the firm said.
On the ground, discounted sales with lowered asking prices are continuing. A 58-square-meter unit at Sanggye Jugong Complex 10 in Sanggye-dong, Nowon-gu, sold last weekend for 660 million won, 20 million won below the initial asking price. A unit of the same size was contracted at 695 million won in February. "As the deadline approached, the seller first cut the price by about 10 million won, and after further negotiations lowered it by another 10 million won to close the deal," an official at brokerage A in the complex said. "Contracts are being signed mainly for listings priced at or slightly below recent transaction levels."
A similar mood is spreading around the Trizium complex in Jamsil-dong, Songpa-gu. "New listings aren't increasing significantly, but there have recently been cases of deals closing at 50 million to 100 million won below the latest transaction prices," an official at brokerage B said. "Sellers are actively engaging in price negotiations."
Experts expect transactions to remain concentrated until just before the capital gains tax moratorium ends. "Additional price adjustments are emerging among existing listings, and last-minute demand targeting these deals has also flowed in, which appears to have driven the increase in land transaction permit applications," said Nam Hyuk-woo, a researcher at Woori Bank's Real Estate Research Institute. Jang So-hee, a real estate specialist at Shinhan Premier Pathfinder, also noted, "Since applications effectively must be submitted by the 8th, sellers under pressure may try to close deals even by lowering prices."
Some forecasts point to a renewed decline in listings once the heavier tax takes effect. "Most of the rushed listings from multi-home owners appear to have been cleared, and listings may decrease or the market may enter a pause phase going forward," said Ham Young-jin, head of Woori Bank's Real Estate Research Lab. "Seoul apartment prices are likely to stay firm or continue their upward trend." He added, "Transaction volumes themselves may decline, but the trend of some jeonse demand in outer Seoul converting to purchases could continue."
Still, some say it is premature to determine the market's direction, as the government is reviewing supplementary measures amid concerns over a listing freeze. In particular, potential policy changes for non-resident single-home owners are cited as a key variable. Kim Yong-beom, director of the Presidential Office's Policy Planning Office, said at a press briefing on May 4, "There are concerns that non-resident single-home owners cannot sell due to tenant-related issues," adding, "We will review measures to allow sales for a certain period." He also mentioned the possibility of adjusting tax benefits under the long-term holding special deduction for single-home owners with investment or non-residency purposes.
"With an estimated 830,000 non-resident single-home owner households in Seoul, if reduced tax benefits and a grace period on actual residency requirements for homes with tenants are implemented together, new listings could enter the market," Nam said. "A new market trend could form centered on inventory from non-resident single-home owners."
