Taking a Breath Ahead of Tax Reform Announcement… Transactions Plummet in Gangnam 3 Districts

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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 stance.

Reporter Baegun has the details.

[Reporter]

This large-scale apartment complex with 9,500 households in Songpa-gu, Seoul.

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

While inquiries from buyers continue, the prevailing mood is to sign contracts only after checking the details of the tax reform package, preventing them from 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 and gift some property, but that person is also watching the tax reform closely before making a move.]

Amid this wait-and-see atmosphere, the growth rate of Seoul apartment sales prices this week stood at 0.25%, narrowing the upward margin for two straight weeks.

The slowdown in the upward trend was particularly noticeable centered around the Gangnam 3 districts.

The upward margins also continued to slow in Guri, Gyeonggi Province; Dongtan-gu, Hwaseong; and Giheung-gu, Yongin, which mark one month since being 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 party-government consultation today (July 30) to finalize the tax reform package for the second half of the year.

The reform package, to be announced early next month, is known to include adjustments to deduction systems focused on actual residents and increases in the tax burden for ultra-high-priced and non-owner-occupied homes.

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

[Ham Young-jin / Head of Woori Bank Real Estate Research Lab: In the case of multiple homeowners, non-owner-occupied single-home owners, and ultra-high-priced homes, some properties to realize capital gains may emerge, centered around older demographics, for the purpose of tax savings.]

However, experts predict that the upward trend centered on mid-to-low-priced homes will continue for the time being, as the shortage of listings in the lease market persists.

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