With the revival of the capital gains tax surcharge on multi-home owners from May 10, a significant share of the bargain properties that multi-home owners had put up for sale to reduce taxes were bought by people who owned no homes, data showed. The number of one-home owners nationwide increased by nearly 120,000 over the first five months of the year. In Seoul in particular, one in two homebuyers was purchasing real estate for the first time in their life.
According to the Supreme Court's Internet Registry Office on Wednesday, the number of nationwide one-home owners holding a single collective building unit — apartments, row houses and officetels — stood at 12,319,770 as of May, up 119,952, or 0.98%, from 12,199,818 at the start of the year. Over the same period, two-home owners fell by 4,962, or 0.29%, to 1,735,357 from 1,740,319, while multi-home owners holding three or more units dropped by 3,735, or 0.74%, to 500,531 from 504,266. In effect, the multi-home properties released into the market ahead of the end of the capital gains tax surcharge moratorium were absorbed by people without homes. The ownership index, which represents the proportion of people owning at least one collective building unit, recorded 28.26% as of last month, the highest since the statistics began in 2010.
This phenomenon was especially pronounced in Seoul, where high home prices had prompted a large number of properties to be put up for sale to avoid the capital gains tax. Of the 72,025 collective building sales registrations in Seoul between January and May this year, first-time buyer registrations accounted for 32,843, or 45.6% of the total. This is more than 9 percentage points higher than the 36.5% share of first-time purchases recorded during the same period last year, and also the highest since the Supreme Court began disclosing the relevant statistics in 2010. In April and May, the first-time purchase share reached 48.7% and 48.5%, respectively, approaching 50%.
Buying by first-time homebuyers was active mainly in non-Gangnam areas, where prices are relatively less burdensome. Nowon District had the highest first-time purchase share at 60.6%, followed by Seongbuk District at 59.8%, Gangbuk District at 57.2%, Seodaemun District at 55.2% and Gwanak District at 52.7%. Gangseo, Geumcheon and Guro districts also exceeded half. By contrast, Gangnam District was the lowest at 31.6%, followed by Seocho District at 32.7% and Yongsan District at 33.4%. By age group, more than half of first-time buyers were in their 30s. The share of those in their 30s rose to 56.1% through May this year from an average of 49.8% last year, exceeding half for the first time on record.
Experts analyzed that as the lending barriers in regulated areas such as Seoul rose, first-time buyers eligible for policy financing actively bought up "tax-saving bargain" properties priced at 1.5 billion won or less, which had to be transacted by May 9. In addition, even after the bargain properties disappeared from the Seoul apartment market with the revival of the capital gains tax surcharge, home buying by people in their 30s without homes has not slowed amid a worsening shortage of jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) and monthly rental housing.
"Among real demand such as single-person households without homes and newlyweds, buying activity is continuing mainly in the outer northeastern areas of Seoul, where jeonse and monthly rents had risen sharply," said Nam Hyuk-woo, a real estate research fellow at Woori Bank. "The 'price catch-up' that began in areas such as Seongbuk District and Nowon District appears to be taking place mainly in areas where price gains had been relatively slow, such as Jungnang District and Dobong District."
