"Didn't Want to Buy a Home"... Seoul Apartment Buyers Flocked to Mid- to Low-Priced Segment After Tax Reform Plan [Real Estate AtoZ]

Share of Transactions at 600 Million Won or Less Surges from 17% to 25%... One in Four Deals

Gangnam and Seocho Down for 8 Straight Weeks, Northern Seoul Continues to Rise

Following the government's August 3 tax reform plan, 8 out of every 10 apartment sales in Seoul have been priced at 1.5 billion won or less. This trend reflects a shift of practical homebuyers from high-end housing, which was affected by reduced mortgage limits after October 15 policy measures last year, to the mid- to low-priced market where policy loans remain available.

According to an analysis of transaction data from the Ministry of Land, Infrastructure and Transport’s actual transaction price system on October 5, as much as 79% of apartment contracts in Seoul signed after the August 3 tax reform plan were for properties priced at 1.5 billion won or less (excluding canceled contracts and those purchased by public institutions).

The share of transactions priced at 1.5 billion won or less has continued to increase since mortgage regulations were tightened. During the 10 months prior to the October 15 measures (from December 2024 to September 2025), the average share was 73.3%. In the 10 months following this policy (from October 2025 to July of this year), it rose to 76.8%. Since August, after the August 3 tax reform plan, the figure increased further to 79%.

The surge was even more pronounced among lower-priced apartments. The proportion of transactions priced at 600 million won or less soared from 17.0% (December 2024 to September 2025) to 25.0% since August of this year—meaning one out of every four Seoul apartment transactions involved properties priced at 600 million won or less.

This is attributed to previously rent-burdened non-homeowners moving into ownership by taking out policy loans with interest rates in the 3% range, such as first-time homebuyer loans. The segment between 600 million and 900 million won also increased during the same period, from 23.2% to 27.6%.

In contrast, the share of transactions dropped when prices exceeded 900 million won. For apartments between 900 million and 1.5 billion won, the transaction share fell from 33.1% to 26.3% starting in August. This has been attributed to the end of policy loan support, which made personal liquidity a higher entry barrier; for a 900 million won apartment, the loan-to-value (LTV) ratio is capped at 40%, meaning buyers must have at least 540 million won in cash on hand.

The ultra-high-priced apartment market contracted even more. For homes priced above 2.5 billion won, the transaction share fell from 8.3% (December 2024 to September 2025) to 5.8% since August. Homebuyer sentiment weakened due to a combination of increased property tax burdens under the tax reform and ongoing loan restrictions.

Currently, the maximum mortgage limit is 600 million won for properties priced at 1.5 billion won or less. For apartments priced between 1.5 billion and 2.5 billion won, the limit is 400 million won, and for those priced above 2.5 billion won, the cap drops to 200 million won.

According to Korea Real Estate Board, apartment prices in Gangnam-gu and Seocho-gu have declined for eight consecutive weeks since the tax reform announcement. There have even been urgent sales with prices more than 1 billion won below previous highs. Meanwhile, prices in relatively lower-priced districts such as Nowon, Dobong, and Gangbuk continue to rise. However, there are predictions that rising prices in these areas are beginning to slow due to market fatigue, and as large-price drops in the Gangnam area are transacted first, the price gap between high-end and mid- to low-priced markets is expected to gradually narrow.

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