"Hurry, Please Sell It After Cutting 120 Million Won"...Gangnam Multi-Homeowners Start to Abandon 'Holding Out'

Multi-Homeowners Shift From Holding Out to Hurried Selling
"Please Sell by May 8" in Gaepo-dong
Mass Texts Sent to Real Estate Agencies

A sign advertising a property for quick sale is posted in front of a real estate agency in Gangnam-gu, Seoul. Yonhap News

"A landlord who owns multiple homes said he was in a hurry and put the property on the market as an ultra-quick sale at 120 million won below the asking price, and the deal was closed the same day," said realtor A in Suseo-dong, Gangnam-gu.

"The owner of Raemian Blestige in Gaepo-dong sent out a mass text message saying, 'Please sell by May 8,' and about 50 nearby real estate agencies are advertising it," said realtor B in Daechi-dong, Gangnam-gu.

As President Lee Jaemyung has repeatedly ramped up pressure on owners of multiple homes and vowed to crack down on real estate speculators, on February 4 landlords in Seoul's Gangnam-gu, his primary target area, have begun to be spotted putting their homes up for urgent sale. With President Lee reiterating that the temporary suspension of heavier capital gains tax on multiple-home owners will end on May 9, some of these owners appear to be "raising the white flag." There are also projections that more properties will come onto the market, as the government is pursuing a plan to allow several months of leeway until deals are finalized in order to prevent market turmoil.

According to information confirmed by The Asia Business Daily that day, ultra-quick sale listings have started to appear in Gangnam, Seoul, and they are being sold immediately. A 49-square-meter exclusive-use apartment in Kkachimaeul, Suseo-dong, was sold at 120 million won below the asking price. The asking price was 1.55 billion won, but it was snapped up in an instant for 1.43 billion won. A nearby real estate industry official said, "There is a mood where properties with reduced prices are starting to come out one by one."

In Gaepo-dong, a text message asking to sell a 113-square-meter exclusive-use unit at Raemian Blestige for 4.3 billion won was delivered to nearby real estate agencies. The lowest asking price for this apartment is 4.35 billion won, and the owner is asking for it to be sold 50 million won cheaper than that.

Apartment buildings in downtown Seoul. Yonhap News

This atmosphere is related to the fact that since last weekend President Lee has been posting messages on X (formerly Twitter) targeting owners of multiple homes day after day. By stressing that "It will be more advantageous to sell than to hold, and to sell early rather than late," he is prompting some landlords to abandon their wait-and-see stance. Realtor C in Seocho-dong, Seocho-gu, said, "As talk grows that the heavier capital gains tax will be reinstated and even property holding taxes will be further strengthened going forward, owners of multiple homes are doing the math, and if they think they will take a loss, they are putting their properties on the market," adding, "There is also strong pent-up demand from buyers asking us not to post urgent-sale properties online but to inform them immediately."

The likelihood of additional properties being released onto the market has increased further as the government moves ahead with a plan to end the temporary suspension of heavier capital gains tax on multiple-home owners, while at the same time responding to claims that "it is difficult to sell a home within three months" by allowing the deadline for completing transactions to be pushed back by up to six months.

Ham Youngjin, head of the Real Estate Research Lab at Woori Bank, explained, "The government is sending a consistent signal about strengthening taxation on non-owner-occupied properties or owners of multiple homes, and we believe this will have an impact on bringing those properties onto the market," adding, "With the Lunar New Year holidays and all, if the period for paying the balance or the timing of registering the transfer of ownership is deferred, that could encourage more people to decide to sell their homes."

However, despite some urgent-sale listings, on the ground the prevailing view is that there has been little change even with the reinstatement of heavier capital gains tax, with comments such as "Landlords are not lowering their asking prices." The strong perception is that "holding out" worked under the previous Moon Jae-in administration and will work under the current administration as well. An official at a real estate agency in Dogok-dong, Gangnam-gu, said, "Even during the Moon Jae-in administration, only the very risk-averse people sold everything, and now there are no such people," adding, "Having gone through all of that, there are not many people who will be shaken by what the president says now, and there is unlikely to be major unrest not only in Gangnam but also in the outskirts of Seoul."

There are also calls for measures to address situations where existing tenants make it impossible to sell even if the landlord wants to. As all of Seoul has been designated a land transaction permit zone, buyers are subject to an obligation to use the property as their primary residence. Those wishing to purchase must submit a confirmation that the lease contract has ended and that the existing tenant will vacate the property. One option is for the current landlord to offer a premium to persuade the tenant to move out, but if the tenant still refuses, the property cannot come onto the market.

Yoon Sumin, real estate specialist at NH Nonghyup Bank, said, "There may be fairness issues, but if measures are put in place to create exceptions to the regulations within land transaction permit zones, such as allowing transactions as long as the buyer actually occupies the home after the lease expires, then more properties owned by multiple-home owners will be released onto the market," adding, "The biggest factor behind the current market imbalance is the lack of listings, and if exceptions are introduced to the land transaction permit zone regulations, that could also curb the practice of sellers unilaterally raising their asking prices."

This content was produced with the assistance of AI translation services.