Seoul's land transaction permit filings surged past 900 on May 4, roughly double the daily average recorded in April. The rush comes as the May 9 expiration of the capital gains tax moratorium for multi-home owners approaches, with last-minute deals accelerating. While a property lock-up and transaction cliff are widely expected after the heavier tax takes effect, analysts say a potential policy change allowing non-resident single-home owners to dispose of tenant-occupied properties could emerge as a key variable.
According to the Saeol electronic civil petition portal on the 6th, Seoul recorded a total of 919 land transaction permit filings in May as of the previous day. Taking the holiday period into account, all 919 filings were submitted on May 4 alone. The figure is nearly double the April daily average of 462.
Seoul's land transaction permit filings have risen steadily, from 5,138 in February to 8,550 in March and 10,165 in April. To avoid the heavy capital gains tax on multi-home owners, sellers had to file for a land transaction permit by mid-April, receive approval, and sign a sales contract, which led filings to plateau or decline somewhat in late April. After the government announced that filings submitted by May 9 would be exempt from the heavy tax, homeowners who had been weighing their options moved to close deals for tax savings.
By district, filings were concentrated in areas with clusters of mid- to low-priced apartments under 1.5 billion won. Nowon-gu led with 102 filings, followed by Songpa-gu (60), Guro-gu (55), Eunpyeong-gu (52), and Gangseo-gu (51). As transactions picked up, listings have declined. According to real estate big data firm Asil, Seoul apartment listings stood at 70,133 on the same day, down about 10,000 units (12.42%) from the March 21 peak of 80,080. With the tax deadline approaching, new listings have been limited, while existing listings offering room for price negotiation are being absorbed quickly.
On the ground, price-cut fire sales are continuing. A 58-square-meter unit at Sanggye Jugong 10 Complex in Sanggye-dong, Nowon-gu, changed hands last weekend for 660 million won, 20 million won below the initial asking price. The same unit type in the complex had been contracted at 695 million won in February. "As the deadline approached, the seller lowered the asking price by 10 million won last week, which attracted buyers, and the deal closed after a further 10 million won cut through additional negotiation," an official at brokerage A within the complex said. "Transactions are concentrated on listings priced at or below recent transaction prices."
A similar atmosphere was observed in other areas. An official at brokerage B in the Trizium complex in Jamsil-dong, Songpa-gu, said, "Additional listings aren't coming out, but as we near the deadline, deals are being struck at 50 million to 100 million won below recent transaction prices. Sellers are also open to price negotiations."
Experts expect last-minute deals to be concentrated this week. Nam Hyuk-woo, a researcher at Woori Bank's Real Estate Research Lab, said, "Among existing listings, additional price adjustments are occurring, and with buyers picking up last-minute fire sales, land transaction permit filings appear to have increased." Jang So-hee, a real estate specialist at Shinhan Premier Pathfinder, noted, "Since filings must effectively be submitted by the 8th, sellers who absolutely must sell will likely move to close deals even by lowering prices."
The prevailing view is that listings will thin out and prices will rise again once the heavier capital gains tax takes effect. Ham Young-jin, head of Woori Bank's Real Estate Research Lab, said, "Fire sales by multi-home owners appear to be largely winding down, and listings are projected to decline or remain in a lull. Seoul apartment prices are expected to hold firm or rise." He added, "Transactions may decline for a while, but with steady demand for home ownership, conversions from jeonse demand to purchases in Seoul's outer districts are likely to continue."
Some analysts say it is too early to be definitive about the market's direction, given that the government is discussing measures to address the property lock-up. In particular, changes to policies on non-resident single-home owners could shape new listing flows. Kim Yong-beom, Director of the Office of Policy Planning at the Presidential Office, said at a press briefing on the 4th, "There are claims that non-resident single-home owners cannot sell their homes because of sitting tenants, and we will review a plan to allow sales within a certain period." He also signaled that tax benefits related to investment- or non-residential-purpose single-home owners under the long-term holding special deduction could be adjusted.
"With non-resident single-home owners in Seoul estimated at around 830,000 households, if reduced tax benefits and a moratorium policy allowing sales of tenant-occupied properties by non-resident single-home owners are combined, supply could come onto the market," Nam said. "A new chapter centered on listings from non-resident single-home owners could open."
