Ahead of the announcement of real estate tax reform plans, the number of Seoul apartment listings is diverging by district. Listings edged up in Seocho, Gangnam, and Yongsan, but fell by double digits in relatively lower-priced areas such as Dobong, Gangbuk, and Guro. While owners of high-priced dwellings are weighing whether to sell as they watch the tax overhaul, in the outskirts of Seoul, listings appear to have been withdrawn by landlords or partially absorbed by end users.
According to big data firm Asil on the 21st, as of the previous day, Seoul apartment sale listings totaled 60,058. That was down 2.9% from 61,874 on May 20.
Overall listings in Seoul declined, but trends differed by district. In Seocho District, where high-priced dwellings are concentrated, listings rose 3.8% over the same period, from 7,129 to 7,398. Gangnam District also increased 3.1%, from 9,279 to 9,569, and Yongsan District rose 3.4%, from 1,704 to 1,762.
With the government reviewing ways to increase the tax burden on high-priced dwellings and nonresidential dwellings, some landlords in these areas are said to have begun considering sales. However, because the tax package is not finalized, it is not yet a phase where a wave of quick sales at reduced prices is emerging in earnest, on-the-ground brokerages said.
In contrast, listings fell quickly in outer Seoul. In Dobong District, listings decreased 12.7% in a month, from 2,271 to 1,982. Gangbuk and Guro districts each fell 11.8%, and Jungnang and Geumcheon each dropped 10.2%.
These areas have a smaller share of high-priced dwellings than the Gangnam area, so the direct impact of changes to property-holding taxes is expected to be relatively limited. There is also analysis that listings were partially absorbed as demand from end users seeking mid- to low-priced apartments continued.
Even in Gangnam and Yongsan ahead of the tax overhaul, a clear trend of sellers aggressively cutting asking prices has not yet emerged. Nam Hyeok-u of the Woori Bank Real Estate Research Institute said, "There are places where listings are increasing on the ground, but there are not many properties coming out at low prices," and added, "Both sellers and buyers are waiting for the tax changes, so properties on the market now can be seen as potential listings from landlords still debating whether to sell."
The flow of listings ahead will likely vary depending on the degree of strengthening in holding taxes and changes to the long-term holding special deduction for capital gains tax. If nonresidential single-dwelling owners and long-term holders of high-priced dwellings move to sell to reduce their tax burden, listings could increase further, centered on the Gangnam area.
Kim Yong-beom, Blue House policy chief, appeared on KBS "Sunday Diagnosis" on the 19th and, regarding capital gains tax on nonresidential dwellings, said, "We can design the system to allow sales at an appropriate time, and after that time passes, the burden can become somewhat higher." This is interpreted as meaning the government could consider giving a set disposal period instead of applying the tougher tax immediately.
However, if the level of tightening for holding and capital gains taxes is lower than expected, or if there is a long grace period before application, the wait-and-see mood could persist. Some also note that even if listings increase, if landlords do not lower their asking prices, it will be difficult to lead to an actual increase in transactions or stabilization of home prices.