Awaiting Tax Reform Draft, Gangnam 3 Districts See Steep Drop in Transactions

[Anchor]

Ahead of the government's announcement of its tax reform proposals, the upward trend in Seoul apartment prices has slowed for two consecutive weeks. In particular, transactions have decreased in the "Gangnam 3" districts, which feature many high-priced homes, deepening a wait-and-see attitude.

Reporter Baegun.

[Reporter]

This large apartment complex consisting of 9,500 households in Songpa-gu, Seoul.

While sales contracts reached 38 in May, the final month of the grace period for heavy capital gains taxes on multiple homeowners, they dropped to 9 last month and have stood at just 2 this month.

Inquiries from potential buyers continue, but the prevailing sentiment is to wait and check the details of the tax reform package before signing contracts, meaning they are not translating into actual transactions.

[Ji Byung-guk / Real Estate Agent in Songpa-gu, Seoul: "(Some clients) wanted to move from Seocho-gu to Songpa or Gangdong, or proceed with some gifts, and we had such inquiries. But that person is also watching the tax reforms closely before making a move."]

Amid this cautious atmosphere, the growth rate of Seoul apartment sales prices this week registered at 0.25%, narrowing the upward margin for the second straight week.

The slowdown in price increases was particularly pronounced centered around the Gangnam 3 districts.

The growth rates also continued to slow in Guri, Gyeonggi Province, Dongtan-gu in Hwaseong, and Giheung-gu in Yongin, which have been designated as additional regulated zones for a month now.

On the other hand, some areas in Gangbuk with many mid- to low-priced apartments showed growth rates exceeding the Seoul average.

The government and the ruling party held a closed-door consultation meeting today (July 30) to finalize the tax reform package for the second half of the year.

The reform package, set to be announced early next month, is reportedly expected to overhaul deduction systems focusing on actual residency while increasing the tax burden on ultra-high-priced and non-primary residences.

The market is paying close attention to whether listings for high-priced homes will increase following the tax reforms.

[Ham Young-jin / Head of Woori Bank Real Estate Research Lab: "For multiple homeowners, single homeowners who do not reside in their properties, and ultra-high-priced homes, some properties taken for capital gains may emerge primarily among older demographics for tax-saving purposes."]

However, experts predict that the upward trend centered around mid- to low-priced homes will likely continue for the time being, as shortages of listings in the lease market persist.

(Camera: Kim Seung-tae | Video Editing: Kim Jin-won | Design: Hwang Se-yeon)
※ Please note: This article was translated by AI and may contain errors.