Apartment monthly-rent listings in Seocho District, Seoul, have surged nearly 26% so far this month. With sales failing to materialize even ahead of the end of the capital gains tax relief for owners of multiple homes, analysts said landlords are shifting their listings to monthly rent. As the possibility of strengthening property holding taxes is also being discussed, some interpret this as a full-fledged move to pass the tax burden on to tenants.
According to real estate big data platform Asil on the 14th, monthly-rent apartment listings in Seocho District totaled 4,297 as of the previous day. That is up 25.9% (885 listings) from the 3,412 recorded on the 1st.
Monthly-rent listings in Seocho District had been declining since Jan. 23, when President Lee Jae-myung formalized the plan to end the capital gains tax relief for owners of multiple homes. They fell to as low as 2,468 in early Mar., but have recently turned upward again.
Jeonse listings are also increasing, but the rise in monthly rent is steeper. Compared with early Mar., when listings were the fewest, the growth rate of monthly-rent apartment listings in Seocho District reached 74.1%. That is more than 10 percentage points higher than the jeonse listings' growth rate (60.2%) over the same period.
On the ground, the sluggish sales market is said to be driving conversions to monthly rent. A licensed real estate agent in Banpo-dong, Seocho District, said, "Due to lending curbs, even ultra high-priced apartments are hard to complete a transaction even when listed as urgent sales," adding, "Owners of multiple homes are turning sale properties into high monthly rents to withstand holding taxes and financing expenses."
Seocho District is cited as an area with a high share of owners of multiple homes even within Seoul. According to the Ministry of Data and Statistics (MODS) '2024 Housing Ownership Statistics,' there are 371,826 owners of multiple homes residing in Seoul, of whom 21,702 live in Seocho District, accounting for 16.7% of the total.
As a cluster of high-priced dwellings, monthly rent levels are also high. According to the Ministry of Land, Infrastructure and Transport's actual transaction disclosure system, among monthly-rent contracts concluded in Seocho District from the start of the year through the previous day, transactions with monthly rent exceeding 5 million won accounted for 5% (224 cases) of the total. In Mar., an exclusive 168㎡ unit at Raemian Prestige in Seocho District was transacted with a deposit of 100 million won and monthly rent of 10.8 million won.
Analysts said this trend is also tied to the government's revamp of holding taxes. The tax law amendment to be announced in Jul. is highly likely to include measures to increase the burdens of the comprehensive real estate tax and property tax. Because holding taxes are particularly punishing for high-priced dwelling owners and owners of multiple homes, some argue that "tax shifting" to lower the tax burden is becoming visible first in Seocho District.
Ko Jun-seok, a professor at Yonsei University Sangnam Institute of Management, said, "Seocho District is an area that reacts sensitively to tax changes," adding, "The shift to high monthly rents due to holding tax burdens could spread to the outskirts of Seoul going forward."
The move toward high monthly rents has also appeared recently north of the Han River. In Mar., an 84㎡ exclusive unit at "Hanwha Forena Mia" in Gangbuk District was newly contracted with a deposit of 50 million won and monthly rent of 3 million won. On the 9th of this month, the same floor plan set a new high when it was transacted at monthly rent of 3.1 million won under the same deposit terms.