As President Lee Jae-myung keeps up pressure on owners of multiple homes, attention is on whether apartment prices in Seoul's Gangnam District will turn downward.
According to the Korea Real Estate Board (REB) on the 22nd, in the third week of February (as of Feb. 16), apartment prices in Gangnam District rose 0.01% from the previous week, showing a level close to flat.
The rate of increase in Gangnam District apartment prices expanded to 0.20% in the third week of January (as of Jan. 19) this year, but has been easing since the president repeatedly mentioned ending the grace measure on heavy capital gains taxes for multiple-home owners. If this trend continues, some say prices could turn to a decline in one to two weeks.
The recent slowdown in gains in Gangnam District appears to be influenced by a surge of quick listings aimed at tax savings by multiple-home owners ahead of heavier capital gains taxes, as well as an increase in listings from single-home owners of high-priced properties who are mindful that, after the June local elections, discussions on revamping the property holding tax and reducing the long-term holding special deduction could intensify. According to real estate big-data firm Asil, as of the day, there were 9,004 apartment listings in Gangnam District, up 18.8% from a month earlier (7,0576 listings).
Asking prices are also falling. In December last year, a 84㎡ exclusive-use unit at Gaepo-dong Gaepo Xi Residence was recorded in a transaction at 4.27 billion won, and recently a listing lowered by 470 million won to 3.8 billion won has been put on the market with an "immediate move-in available" condition. In high-priced apartment complexes slated for reconstruction, some listings have cut prices by more than 1 billion won. For a 183㎡ exclusive-use unit at Hyundai Apartment in Apgujeong, the previous record high was 12.8 billion won, but recently there have been cases where the asking price was lowered to the 10 billion to 11 billion won range.
Nam Hyuk-woo of the Woori Bank Real Estate Research Institute said, "In Gangnam District, there is movement to realize gains due to fatigue from a rapid short-term price surge, and considering the influence of listings from older single-home owners mindful of future tax burdens and quick-sale listings reflecting price adjustments for apartments subject to reconstruction, there is a possibility of a downward reversal."
However, in the greater Gangnam area, there is still a queue of would-be buyers with ample cash reserves waiting to secure listings with somewhat lowered prices, leading to expectations that prices will not fall by a large margin.