Apartment monthly rental listings in Seocho District, Seoul, have surged nearly 26% so far this month. With sales not closing even ahead of the end of the capital gains tax relief for owners of multiple homes, analysts say landlords are switching listings to monthly rentals. With the possibility of stronger holding taxes being discussed, some interpret the trend as a full-fledged move to pass the tax burden on to tenants.
According to real estate big data platform Asil on the 14th, as of the previous day there were 4,297 apartment monthly rental listings in Seocho. That is up 25.9% from the 3,412 listings on the 1st of this month. In less than half a month, monthly rental listings increased by 885.
Seocho's monthly rental listings 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. The number fell to 2,468 in early Mar., but has recently turned upward again.
Jeonse listings are also increasing, but the rise in monthly rentals is steeper. Compared with early Mar., when listings were scarcest, Seocho apartment monthly rental listings posted a 74.1% growth rate. That is more than 10 percentage points higher than the jeonse listings growth rate (60.2%) over the same period.
On the ground, the slump in the sales market is seen as fueling a shift to monthly rentals. A licensed realtor in Banpo-dong, Seocho, said, "Because of loan regulations, even ultra-high-priced apartments are hard to close even when listed for quick sale," adding, "Owners of multiple homes are turning for-sale properties into high-rent monthly leases to endure the burden of holding taxes and financing expenses."
Seocho is regarded as a district 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 Seoul residents owning multiple homes, of whom 21,702 reside in Seocho, accounting for 16.7% of the total.
As an area dense with high-priced dwellings, monthly rents are also high. According to the Ministry of Land, Infrastructure and Transport's actual transaction disclosure system, among Seocho monthly rental contracts concluded from the start of the year through the previous day, transactions with monthly rent over 5 million won accounted for 5% (224 cases) of the total. In Mar., a 168-square-meter unit at Raemian Prestige in Seocho was transacted with a 100 million won deposit and 10.8 million won in monthly rent.
The increase in monthly rental listings for Seocho apartments coincides with the government's overhaul of holding taxes. The tax reform bill to be announced in Jul. is widely expected to include measures to strengthen the burden of the comprehensive real estate tax and the property tax. Because holding taxes are especially punishing for high-priced dwelling owners and owners of multiple homes, some analysts say "tax shifting" to reduce the burden is becoming visible first in Seocho.
Ko Jun-seok, a professor at Yonsei University's Sangnam Institute of Management, said, "Seocho is a district that reacts sensitively to tax changes," adding, "The shift to high-rent monthly leases could spread to the outskirts of Seoul going forward."
The move toward high monthly rents has recently spread to Gangbuk. In Mar., an 84-square-meter unit at "Hanwha Forena Mia" in Gangbuk District was newly leased with a 50 million won deposit and 3 million won in monthly rent. On the 9th of this month, a unit of the same size set a new record when it transacted at 3.1 million won in monthly rent with the same deposit terms.