Apartment Market Pauses Ahead of Tax Reform Announcement; Transactions Plunge

[Anchor]

Ahead of the government's tax reform announcement, the upward trend in Seoul apartment prices has slowed for two consecutive weeks. In particular, the Gangnam three districts, which feature many high-end homes, are seeing a drop in transactions as buyers adopt a wait-and-see attitude.

Reporter Baegun has the details.

[Reporter]

A large-scale apartment complex with 9,500 units 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, the number dropped to 9 last month and stood at just 2 this month.

Inquiries from prospective buyers continue, but the prevailing sentiment is to wait and see the details of the tax reform bill before signing contracts, meaning they are not translating into actual deals.

[Ji Byung-guk / Real Estate Agent in Songpa-gu, Seoul: "There were inquiries from people wanting to move from Seocho-gu to Songpa or Gangdong, or to make some gifts through donation, but that person also intends to watch the tax reform unfold before making a move."]

Amid the cautious atmosphere, the increase rate for Seoul apartment sales prices this week stood at 0.25%, narrowing the growth for two weeks in a row.

The slowdown in the upward trend was particularly noticeable centered around the Gangnam three districts.

Guri-si in Gyeonggi Province, Dongtan-gu in Hwaseong-si, and Giheung-gu in Yongin-si also continued to see a slowdown in price growth, marking one month since they were designated as additional regulated zones.

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 consultative meeting yesterday (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 known to include overhauling deduction systems to center around actual residents and increasing the tax burden on ultra-high-end and non-residence homes.

The market is paying close attention to whether listings of high-end homes will increase following the tax restructuring.

[Ham Young-jin / Head of Woori Bank Real Estate Research Lab: "For multiple homeowners, single-home owners who do not reside in their properties, and ultra-high-end homes, some properties driven by capital gains realization might appear, particularly among the elderly demographic for tax-saving purposes."]

However, experts forecast that the upward trend centered on mid- to low-priced housing will likely continue for the time being, as shortages of rental listings persist.

(Photo courtesy of Yonhap News / Reported by Kim Seung-tae, Video by Kim Jin-won, Graphics by Hwang Se-yeon)
※ Please note: This article was translated by AI and may contain errors.