Tension is mounting in Seoul's apartment market ahead of the expiration of the multi-home owner capital gains tax moratorium. Low-priced listings aimed at avoiding taxes have been changing hands one after another, slowing the rate of price increases, but the prevailing view is that a listings shortage will emerge as the supply of rush sales is exhausted and new listings dry up.
According to KB Real Estate's weekly apartment market trends released Wednesday, Seoul apartment prices rose 0.18 percent in the first week of May (as of the 4th). This marks a narrower gain than the previous week's 0.21 percent, the second consecutive week of weakening momentum.
Regional polarization is pronounced. Outer districts including Jung-gu (0.73 percent), Nowon-gu (0.31 percent) and Dobong-gu (0.31 percent) continued their upward trend. In contrast, Gangnam-gu, where high-priced homes are concentrated, fell 0.16 percent, marking 10 consecutive weeks of decline.
With the expiration of the capital gains tax moratorium approaching, the market is in wait-and-see mode. The buyer superiority index, which gauges sentiment in Seoul's apartment market, stood at 76.8, up 3.4 points from the previous week. A reading below 100 on the index indicates that sellers outnumber buyers.
Experts predict that the listings crunch could intensify as early as next month. "Tax-avoidance sales have been concentrated through the 9th, but after that, the sharp increase in tax burdens will weaken multi-home owners' incentive to put new listings on the market," said Kim Hyo-sun, senior specialist at KB Real Estate. "Once the current accumulated listings are exhausted, the pace of listings decline could steepen more sharply than expected from June and July."
Meanwhile, the heavy taxation of multi-home owners' capital gains, which had been suspended for four years since 2022, will resume on the 10th.
Under the system, when a home in a designated speculation zone is sold, a surcharge of 20 percentage points is added to the basic tax rate (6 to 45 percent) for two-home owners, and 30 percentage points for those owning three or more homes. Adding local income tax (10 percent), the top rate for owners of three or more homes reaches 82.5 percent.
The current framework was introduced under the Moon Jae-in administration in 2021. However, shortly after the Yoon Suk-yeol administration took office in May 2022, the enforcement decree of the Income Tax Act was amended to delay implementation by one year, and the moratorium has been extended annually since then.
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