As the government tightens regulations on owners of multiple homes and turns up the pressure, apartment listings in Seoul are rising quickly. However, transactions are not keeping pace with the speed at which listings are piling up. Asking prices are trending lower, but would-be buyers are becoming even more cautious.
According to real estate information platform Asil on the 20th, Helio City (9,510 households) in Garak-dong, Songpa District, Seoul, the second-largest apartment complex in Korea, saw listings surge to 908 as of the 18th from 468 on Jan. 1, roughly doubling. The volume listed amounts to about 10% of all households. An industry official said, "Usually 3% to 5% of households come onto the market, so the fact that it has risen to 10% means the market is shifting in favor of buyers."
Asking prices are falling, especially for larger units. A Helio City unit with an exclusive area of 110 square meters that sold for 3.515 billion won in December last year now has asking prices down into the 3 billion won range. Listings labeled "urgent sale" and "super-urgent sale" have increased, but there reportedly are not many purchase inquiries. A representative at a certified real estate agency in Jamsil said, "Calls from homeowners asking us to put their homes up as urgent sales have increased, but there are few people saying they will buy," adding, "The wait-and-see mood has strengthened as people wait for prices to fall further."
After the government decided to end, as scheduled on May 9, the temporary relief from the heavier capital gains tax on owners of multiple homes, it appears that people are putting dwellings on the market one after another out of concern over higher tax burdens. By Seoul district, Songpa District had the highest growth rate at 40.7%. Listings rose from 3,351 early this year to 4,714 as of the 18th. Next were Seongdong District (36.2%), Gwangjin District (36.2%), Seocho District (27.6%), Gangnam District (22.7%), and Yongsan District (20.6%). In Gyeonggi Province, listings increased rapidly in Bundang District of Seongnam (37.3%), Gwacheon (31.7%), Dongan District of Anyang (18.8%), and Sujeong District of Seongnam (11.6%).
A representative at a certified real estate agency in Jamsil said, "There were quite a few people inquiring over the Lunar New Year holiday about listings with tenants in place," adding, "Because the initial cash outlay is smaller, people with less cash on hand seem to be looking for such listings." The government announced supplementary measures that allow a 4- to 6-month grace period from contract to final payment and registration when owners of multiple homes dispose of a home, and, if there is an existing tenant, postpone the owner-occupancy requirement for up to two years. The representative said, "However, there is a pervasive sense that people are watching and waiting for prices to fall further."
The problem is that even if listings pour out, there is no one to take them. According to KB Real Estate, the buyer's market index for the second week of February (as of the 9th) was 85.3, down 9.6 points from the previous week (94.9). Compared with the last week of January (99.3), it plunged more than 10 percentage points. It is also the lowest level of the year. The buyer's market index rises when the number of people wanting to buy dwellings increases and falls when the number of people wanting to sell increases.