June Seoul Apartment Land Transaction Permit Application Prices See Sharpest Rise Since October 15 Measures

The month-on-month increase in prices for new land transaction permit applications for apartments in Seoul reached its highest level last month since the government announced its October 15 measures last year.

The Seoul Metropolitan Government analyzed and released data on the changes and volume of land transaction permit applications for June on July 10.

The city government analyzes and discloses the status of land transaction permit applications every month with the aim of minimizing gaps in real estate information.

According to the data, the average price of all land transaction permit applications filed in Seoul in June rose by 2.67% compared to the previous month.

This figure is not only higher than the 1.87% increase recorded in May, but also marks the highest rate since the entire city of Seoul was designated as a land transaction permit zone following the October 15 measures last year.

The city analyzed that this trend is due to the fact that "after most of the urgent properties intended for tax savings were absorbed ahead of the expiration of the grace period for heavy capital gains taxes on multi-home owners on May 9, transactions of such urgent properties concluded, and general transactions maintaining existing asking prices increased, leading to sustained buying interest centered on actual demand."

Land transaction permit application prices rose across all districts in Seoul, with the Gangnam 3 districts and Yongsan-gu recording the highest increase at 3.1%.

These areas had previously recorded the lowest increase at 1.01% in the previous month, but saw the growth rate expand significantly in just one month.

This was followed by the four districts in the southwestern region, which rose by 2.89%, and the ten districts in the Gangbuk region, which rose by 2.86%.

The seven districts in the Han River belt (Gwangjin, Seongdong, Mapo, Dongjak, Yangcheon, Yeongdeungpo, and Gangdong) recorded the lowest increase at 1.89%.

The number of new land transaction permit applications for apartments in June was 5,382, a decrease of 39.7% compared to April (8,925 cases), which saw the highest number of applications, and a 10.9% decrease compared to the previous month (6,043 cases).

Looking at land transaction permit applications on a weekly basis, the number surged to 636.2 in the first week of May, just before the grace period for heavy capital gains taxes on multi-home owners ended, up from 402 the previous week. Since then, the number has dropped significantly, remaining below 300.

The city explained, "This is due to the decrease in application demand that was temporarily concentrated ahead of the expiration of the grace period for heavy capital gains taxes on multi-home owners, as well as market participants adopting a wait-and-see approach ahead of tax reforms in July."

By region, the proportion of land transaction permit applications in the Gangnam 3 districts and Yongsan-gu decreased from 16.7% in May to 13% in June, while the proportion in the ten districts of Gangbuk increased from 41.5% in May to 46.2% in June.

It appears that after the grace period for heavy capital gains taxes ended, transactions for tax-saving purposes in the Gangnam area decreased, and the market shifted toward the Gangbuk area and outer regions, where there are more transactions driven by actual demand with relatively lower burdens such as loans.

There were 279 applications for the deferral of the mandatory residency requirement for "homes with tenants," which has been in effect since June, accounting for 5.2% of all land transaction permit applications.

This ratio was highest in the Gangnam 3 districts and Yongsan-gu at 9.3%, followed by 6% in the Han River belt, 4.6% in the Gangbuk region, and 2.7% in the southwestern region.
※ Please note: This article was translated by AI and may contain errors.