Even though the obligation to live in apartments within land transaction permit zones has been temporarily eased, allowing sales with jeonse tenants in place, the market has yet to show a clear response.
According to the real estate industry on the 31st, starting on the 29th and running through the end of the year, the government is deferring the owner-occupancy requirement for home buyers without a home who apply for a land transaction permit until the existing tenant's lease expires. As a result, so-called "gap investment transactions" have become possible again, but the number of permit applications remains at usual levels.
In Gangnam District, the number of land transaction permit applications was 11 on the first day of implementation, the 29th, showing little difference from before, and Songpa District also had only nine. Nowon District likewise did not show a noticeable increase.
The number of Seoul apartment listings is also on a decline. According to the real estate platform AShil, Seoul apartment listings stood at 61,441 as of the 31st, down 8.2% from 66,914 on the 10th, immediately after heavier capital gains taxes for multiple-home owners took effect this month.
In the market, some analysts say uncertainty over the direction of tax reform is fueling a wait-and-see mood. Not only multiple-home owners but also nonresident single-home owners have yet to decide whether to sell because changes to property and capital gains tax regimes have not been finalized.
In the Gangnam area, some listings are coming out, but high prices are keeping transactions subdued. In Jamsil, Songpa District, 84 square meters in L'ecenz is currently listed around 3.5 billion won, but buyers are still said to feel burdened by the price.
By contrast, some parts of northern Seoul are seeing a worsening shortage of listings. As jeonse offerings shrink, purchase demand is flowing in and prices are showing strength. In Nowon District, 84 square meters in Forena Nowon recently transacted at 1.35 billion won, setting a new record high.
Industry watchers say both sellers and buyers are likely to move in earnest once tax reform plans take concrete shape after the June 3 local elections. In particular, if policies on property and capital gains taxes are released, the outlook is that whether listings increase will be determined, centered on the Gangnam area.