Despite Shrinking Listings and Slower Transactions, Seoul Sees 'Price Alignment' for Older Apartments Under 1.5 Billion Won

Both Sales and Jeonse Prices Rise Across the Greater Seoul Metropolitan Area

Since the resumption of the heavier capital gains tax, the supply of apartments for sale in Seoul has sharply declined and transaction volumes have returned to normal levels, leading to a pause in activity. However, the upward trend in both sales and jeonse (long-term lease) prices continues, especially in the Seoul metropolitan area. As both buyers and sellers remain cautious ahead of the new tax law announcement scheduled for the end of this month, there has been a noticeable 'price alignment' phenomenon in which record-high prices are set for older apartments priced under 1.5 billion won outside Seoul's Gangnam area.

Apartment complexes around Dongtan Station, Hwaseong City, Gyeonggi Province. Photo by Yonhap News

Nationwide Apartment Price Growth in the Second Week of July

According to the real estate price survey conducted by Real Estate 114's artificial intelligence (AI) on July 11, apartment prices nationwide rose by 0.14% in the second week of July. Out of 17 cities and provinces, 12 saw prices increase, 1 remained unchanged, and 4 experienced declines, with upward movement dominating across the country.

Seoul recorded a 0.16% increase, while Gyeonggi and Incheon saw a 0.19% rise, resulting in price growth throughout the greater Seoul metropolitan area.

Outside the metropolitan region, the five major cities posted a 0.02% increase, and other provinces saw prices climb by 0.01%.

Last month, the nationwide monthly price change reached 0.57%, marking a second consecutive month of widening growth.

Real Estate 114 stated, "Two months after the heavier capital gains tax on multi-homeowners was reinstated on May 9, both sellers and buyers in the Seoul apartment market are pausing to reassess. The number of apartments for sale in Seoul, which had surged to around 80,000 right before the tax hike, has now dropped to about 61,000. Meanwhile, apartment transactions, which had exceeded 8,500 in April and May, are projected to record only 5,500 to 6,000 in June, which is the monthly average."

They added, "While transaction activity has stabilized, there is still ongoing price alignment, with record-high transactions being set for older apartments priced under 1.5 billion won. For instance, in Gangseo District, an 84-square-meter unit at Magok Sumyeongsan Park Complex 1 traded at a record 1.395 billion won, and at Gangbyeon Hansol Solpark, a unit was sold for 1.37 billion won."

They also noted, "In Seongbuk District, Raemian Serenity set a new record at 1.34 billion won, and in Dongdaemun District, Imun Daewoo changed hands for 1 billion won for the first time."

Jeonse Prices for Apartments Nationwide Continue to Rise in the Second Week of July

In the second week of the month, apartment jeonse prices nationwide climbed by 0.17%. Of the 17 cities and provinces surveyed, 16 saw increases and only 1 saw a decline, indicating a strong upward trend in the jeonse market as well.

Seoul rose by 0.19%, while Gyeonggi and Incheon increased by 0.2%, resulting in a 0.2% overall rise for the metropolitan region.

The five major metropolitan cities and other provinces rose by 0.06% and 0.05%, respectively.

Last month's national jeonse price grew by 0.66%, remaining similar to the previous month. Notably, areas with high residential demand, such as Seoul, Gyeonggi, and Sejong, recorded a nearly 1% monthly increase.

A Real Estate 114 official stated, "Until the announcement of the new tax law at the end of this month, it is highly likely that buyers will remain cautious and sellers will deliberate on the optimal timing for selling. In particular, those who own a single home but do not reside in it, as well as owners of high-priced homes, are expected to decide whether to sell after assessing potential changes in their tax burden."

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