Tax Overhaul Announcement Imminent... Housing Transactions Slow and Prices Take a Breather

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The pace of growth in Seoul apartment prices has slowed for two consecutive weeks. A wait-and-see atmosphere continues as the tax reform bill is set to be announced soon.

Reporter Baegun has the details.

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A large-scale apartment complex comprising 9,500 households in Songpa-gu, Seoul.

Sales contracts for this complex, 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 have halted at just 2 this month.

While inquiries from prospective buyers continue, the prevailing sentiment is to check the details of the tax revision bill before signing contracts, meaning they are not translating into actual transactions.

[Ji Byung-guk / Real Estate Agent in Songpa-gu, Seoul: (From Seocho-gu) some wanted to move to Songpa or Gangdong and gift some properties, and there were such inquiries, but that person is also watching the tax reform closely before making a move.]

Amid the atmosphere of caution, the growth rate of Seoul apartment sales prices this week stood at 0.25%, narrowing the upward trend for two consecutive weeks.

The slowdown in the upward trend was particularly pronounced in the three Gangnam districts.

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

On the other hand, some areas in Gangbuk with a high concentration of 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 yesterday (the 30th) to finalize the tax reform plan for the second half of the year.

The revision package, slated for announcement early next month, is reportedly set to overhaul the deduction system to focus on actual residents 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 overhaul.

[Ham Young-jin / Head of Woori Bank Real Estate Research Lab: In the case of multiple homeowners, non-resident single-homeowners, and ultra-high-priced homes, some market listings driven by capital gains might appear, particularly among older demographics aiming for tax savings.]

However, experts predict that the upward trend centered around mid- to low-priced homes will likely 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.