After the surtax on capital gains for owners of multiple homes took effect, clear signs of a "listing freeze" are emerging in the Seoul apartment market. Within two days of implementation, the number of Seoul apartment listings fell by more than 2,800, fueling concerns in the market about shrinking supply. The decline in listings was steepest in districts such as Gangdong, Seongbuk, Nowon and Gangseo. Experts said owners of multiple homes, facing heavier tax burdens, are pulling back fire-sale listings or delaying sales, reducing the number of properties coming to market.
According to real estate big data app Asil on the 12th, as of the previous day, Seoul apartment listings totaled 65,682. That was down 4.2% (2,813) from the 9th (68,495), the last day of the grace period suspending the surtax on capital gains for owners of multiple homes. In March–April, when listings from owners of multiple homes increased, total listings rose into the 70,000 range. Within Seoul, the drop was steepest in autonomous districts including Seongbuk-gu (-21.4%), Guro-gu (-20.2%), Dongjak-gu (-19.5%), Gangdong-gu (-18.8%) and Nowon-gu (-18.4%).
The market views owners of multiple homes as having retrieved fire-sale listings that failed to sell or raised asking prices, moving to the sidelines. Analysts say this is an early stage of a "listing freeze," in which transaction-ready properties dwindle. A real estate expert said, "It is reasonable to see the current decline in listings as driven by owners of multiple homes," and added, "With a heavier tax burden, many landlords are choosing to hold rather than force a disposal."
Kim In-man, head of the Kim In-man Real Estate Research Institute, said, "The government said this time the listing freeze would not be significant, but in the market we are seeing fire-sale retrievals and rising asking prices at the same time." Kim said, "Given the jeonse crunch, it is more likely that landlords will raise jeonse deposits or switch to monthly rent," adding, "Due to land transaction permits and the reduction in the long-term holding special deduction for nonresident single-home owners, a fair number of landlords will likely move in for actual residence."
Experts warn that if the listing freeze persists, the pattern of "listing cliff → jeonse crunch → home price increases" seen under Moon Jae-in could reemerge. If a sense of supply shortage grows, it could stoke buyer sentiment. In particular, if reduced move-in volume overlaps with a jeonse crunch, price instability could spread, centered on the mid- to low-priced apartment market in Seoul.
However, some expect it will not lead to the kind of sharp price spikes seen in the past. The government is reviewing measures to induce additional listings from nonresident single-home owners and registered rental business operators. Minister Kim Yun-duk of the Ministry of Land, Infrastructure and Transport recently said, "We plan to review an exception to land transaction permits for nonresident single-home owners," adding, "We will also examine the appropriateness of the permanent capital gains tax reduction benefits granted to rental business operators."
Park Won-gap, senior real estate expert at KB Kookmin Bank, said, "After the reintroduction of the surtax on capital gains, a reduction in listings from owners of multiple homes is inevitable, but it is hard to see that immediately leading to a listing cliff and a sharp jump in home prices," adding, "The real estate market is one where various variables such as interest rates, liquidity, lending regulations and sentiment interact in complex ways."