The month-on-month price increase for new applications for land transaction permits for Seoul apartments last month hit a record high since the announcement of the Oct. 15 measures last year. On the 10th, the Seoul city government analyzed and released June changes in prices and the number of applications for land transaction permits. The city analyzes and discloses the status of land transaction permit applications every month.
According to the released data, the average price of all Seoul land transaction permit applications received in June rose 2.67% from a month earlier. It was the highest growth rate since all of Seoul was designated a land transaction permit zone under the Oct. 15 measures last year. The rate was up 0.8 percentage points from May's 1.87%.
The Seoul city government analyzed that "as most urgent sales aimed at tax savings that came onto the market ahead of the end of the temporary easing of the heavy capital gains tax on owners of multiple homes (May 9) were absorbed, urgent-sale transactions wrapped up and general transactions that kept existing asking prices increased, sustaining end-user-led buying."
Land transaction permit application prices rose in all areas of Seoul. In particular, the three Gangnam districts and Yongsan District had the highest increase at 3.1%. These areas had the lowest increase a month earlier at 1.01%, but the rise grew in a month.
Next, four districts in the southwest rose 2.89%. Ten districts in the north rose 2.86%, following behind. The seven districts in the Han River belt (Gwangjin, Seongdong, Mapo, Dongjak, Yangcheon, Yeongdeungpo, Gangdong) rose 1.89%, the lowest increase.
The number of land transaction permit applications showed a decline. New applications for apartment land transaction permits in June totaled 5,382, down 39.7% from April, when applications were highest at 8,925, and down 10.9% from the previous month's 6,043.
On a weekly basis, land transaction permit applications jumped to 636.2 in the first week of May, just before the end of the temporary easing of the heavy capital gains tax on owners of multiple homes, from 402 a week earlier, then fell sharply thereafter and have remained below 300.
The Seoul city government explained that it was "the effect of a decrease in temporarily concentrated application demand ahead of the end of the temporary easing of the heavy capital gains tax on owners of multiple homes, and of market participants deferring transactions and taking a wait-and-see stance ahead of the July tax reform."
By area, the share of land transaction permit applications in the three Gangnam districts and Yongsan District shrank to 13% in June from 16.7% in May, while the share of the 10 northern districts grew to 46.2% in June from 41.5% in May.
It is analyzed that after the end of the temporary easing of the heavy capital gains tax, tax-saving transactions in the Gangnam area decreased and transactions shifted toward northern and outer areas, where end-user-centered transactions with relatively lighter burdens such as loans are more common.
Applications to defer the owner-occupancy requirement for "dwellings with tenants," implemented starting in June, totaled 279, accounting for 5.2% of all land transaction permit applications. This ratio was higher in the three Gangnam districts and Yongsan District at 9.3%, while the Han River belt was 6%, the north was 4.6%, and the southwest was 2.7%, it was found.