As the strengthened capital gains tax on transfers is set to take effect and apartment transactions in Seoul have increased, transactions have risen mainly for mid- to low-priced homes at 1.5 billion won or less outside the Gangnam area.
According to actual price report data (based on contract date) released by the Ministry of Land, Infrastructure and Transport on the 12th, the number of apartment sale contracts in Seoul (public institution transaction, cancellations excluded) rose from 5,361 in January to 5,705 in February this year.
In particular, for March, 4,437 cases had been reported as of the 11th. Although the reporting deadline for March contracts runs until the end of this month, about 20 days remain, and already 78% of the prior month's transaction reports have been filed. At this pace, March volume is likely to surpass February's.
March volume especially increased outside Gangnam, including "Nodogang" (Nowon, Dobong, Gangbuk districts) and "Geumgwangu" (Geumcheon, Gwanak, Guro districts). Even though the reporting deadline for March transactions is the end of this month, Jung District (110.0%) and Jungnang District (102.0%) have already surpassed February's volume, and Dobong (98.5%), Geumcheon (95.9%), and Seodaemun (90.4%) each reported more than 90% of February's volume. Jongno (85.0%), Guro (84.7%), Nowon (84.4%), and Gwanak (83.0%) also exceeded 80% of the prior month's volume.
By contrast, in the high-priced Gangnam area and the Han River belt, volume has not increased much from February. Yongsan (51.1%), Gwangjin (54.5%), and Seocho (56.5%) have so far reported only about half of the prior month's volume, and Gangdong (64.9%), Seongdong (66.7%), Yeongdeungpo (68.7%), and Dongjak (68.8%) have fallen short of the 70% level.
In the high-priced Gangnam area, transactions in March appear to have centered mainly on urgent listings. After President Lee Jae-myung on Jan. 23 formalized the end of the grace period for the strengthened transfer tax on multi-home owners and pushed tax reform, and later allowed purchases with tenants in place, transactions such as urgent listings increased.
Because buyers and sellers conclude a transaction agreement, then go through the ward office's land transaction permit period of three weeks (15 business days), and only then draw up the contract, a lag of about one month occurs. As a result, urgent listings that began appearing in February likely had contracts signed from late February into March.
As volume increased outside Gangnam, the share of mid- to low-priced transactions grew further. The share of apartment transactions at 500 million won or less was 79.0% in January this year, 81.3% in February, and 85.4% in March.
By contrast, the share of 1.5 billion to 2.5 billion won transactions, for which the loan limit is reduced to 400 million won, fell from 15.0% in January to 13.7% in February and 11.0% in March. The share above 2.5 billion won, for which only 200 million won in loans is available, declined from 6.0% in January to 5.0% in February and 3.6% in March.
Accordingly, the average sale price of Seoul apartments fell from 1.17416 billion won in January this year to 1.12023 billion won in February and 1.10767 billion won in March. Although there are not many reports yet, the average transaction price in April is 971.84 million won, below 1 billion won.
In particular, in the Gangnam area, where transactions were centered on urgent listings, the average sale price in Seocho fell from 2.76314 billion won in February to 2.13160 billion won in March, and in Gangnam it dropped from 2.64337 billion won to 2.17350 billion won. In Gwangjin, the February average of 1.40132 billion won fell to 1.28232 billion won in March.
Market experts said that although the government decided to extend the grace period for the strengthened transfer tax from "contracts on May 9" to "cases that apply for a land transaction permit on May 9" to encourage listings, many expect volume will not increase significantly after April. Among multi-home owners, those who intended to sell have already rushed urgent listings, and for high-priced apartments, with loan regulations and the burden of property holding taxes, buying interest is not flowing in actively.
Listings, which seemed to increase briefly, have turned back to a decline for now. According to real estate big data firm Asil, Seoul apartment listings, which had been on a downtrend since late March, rose from 75,501 on the 6th to 77,000 on the 8th after President Lee Jae-myung signaled a willingness to extend the strengthened transfer tax grace period to permit applications filed on May 9, but then fell for three straight days to 76,498 on the 11th.