This year, the public price of apartments and other multi-family housing rose by 3.65%. In Seoul, centered around the three districts of Gangnam, the public price increased by more than 7%, driving the rise in public prices nationwide.
The number of dwellings subject to the comprehensive real estate tax for one household, one dwelling is approximately 320,000, an increase of about 50,000 from last year. The burden of property tax is expected to grow, especially in the Seoul area, where the public price has risen significantly.
The Ministry of Land, Infrastructure and Transport announced on the 13th that it will conduct a process for owners to review and provide feedback on the public price (provisional) for multi-family housing (approximately 15.58 million units) assessed as of January 1 of this year, from the 14th of this month until the 2nd of next month.
The public price is used as a basis for various charges such as property tax and health insurance premiums, as well as to determine eligibility for welfare programs for vulnerable groups. It is utilized directly and indirectly in over 60 administrative systems. The government applied a public price ratio of 69.0% compared to market prices for three consecutive years starting from the 2023 public price, resulting in only market fluctuations being reflected in the public price.
The public price for multi-family housing rose by an average of 3.65% nationwide this year. This is higher than the public price increase rate of 1.52% from the previous year. However, it is lower than the average annual fluctuation rate (4.4%) since the introduction of the public pricing system. Over the past five years, the public price for multi-family housing has fluctuated significantly. The public price fluctuation rate was 5.98% in 2020, ▲19.05% in 2021, ▲17.20% in 2022, -18.63% in 2023, and 1.52% in 2024.
By city and province, Seoul's public price increase rate was the highest in the country at 7.86%. It was followed by ▲Gyeonggi (3.16%) ▲Incheon (2.51%) ▲Jeonbuk (2.24%) ▲Ulsan (1.07%).
In particular, within Seoul, the public price increase rate in the three districts of Gangnam was remarkable. Seocho District had the highest public price increase rate at 11.63% in the region. This was followed by Gangnam District at 11.19% and Songpa District at 10.04%. Areas known as 'Ma Yong Sung' also showed high public price increase rates, with Seongdong District at 10.72%, Yongsan District at 10.51%, and Mapo District at 9.34%.
The place with the largest decline in public prices nationwide was Sejong, with a fluctuation rate of -3.28%. It was followed by ▲Daegu (-2.90%) ▲Gwangju (-2.06%) ▲Busan (-1.66%) ▲Gyeongbuk (-1.40%).
The median value of this year's public price is 170 million won, which is an increase of 3 million won from last year's 168 million won. By region, the amounts were Seoul 370 million won, Sejong 281 million won, and Gyeonggi 227 million won.
The average price based on the public price of multi-family housing nationwide was 260.32 million won. Seoul saw an increase of about 43 million won from the previous year to 557.82 million won. This was followed by Sejong at 286.82 million won and Gyeonggi at 274.87 million won.
The number of dwellings subject to the comprehensive real estate tax for one household, one dwelling was counted at 318,308 units, which is 2.04% of the total. Last year, the number of subject dwellings was 266,780 units, or 1.75% of the total. The number of dwellings subject to the comprehensive real estate tax has increased by 51,528 units (0.29 percentage points) in just one year.
Homeowners in Seoul's Gangnam area, where public prices have risen significantly, may experience an increase in property tax burden by as much as 30% this year.
Due to the increased burden of property tax, the number of apartments for sale may rise, particularly in the Gangnam area, but observations suggest that this increase in listings may not lead to a drop in house prices.
Park Won-gap, a senior real estate expert at KB Kookmin Bank, noted, "If property taxes increase, some homeowners may consider selling, but given the ongoing supply shortage, there may still be upward pressure on prices. Especially in the current situation where there is high demand for upgrading to better areas, there will be demand to absorb the listings, so even if tax-saving properties come onto the market, prices are unlikely to drop significantly."
Lee Eun-hyung, a researcher at the Korea Construction Policy Research Institute, explained, "This fluctuation rate is a result of a natural recovery in market prices," adding that "it is not expected to have a significant impact on the market from a general perspective."
The Ministry of Land, Infrastructure and Transport plans to publicize the public price (provisional) for multi-family housing next month after conducting a feedback process and deliberations by the Central Real Estate Price Publicity Committee.