"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 proposal, it was found that 8 out of 10 apartment sales in Seoul were for properties priced at 1.5 billion won or less. This is interpreted as end-users shifting their focus to the mid- to low-priced market, which is eligible for policy loans, as the maximum loan limit for high-priced homes in the Gangnam area was reduced after last year’s October 15 measures, and now another tax reform has been introduced.

According to an analysis of transaction data from the Ministry of Land, Infrastructure, and Transport's actual transaction price system on October 5, the proportion of Seoul apartment transactions for 1.5 billion won or less, contracted after the August 3 tax reform announcement, reached 79% (excluding canceled contracts and purchases by public institutions).

The share of transactions at 1.5 billion won or less has steadily grown since loan regulations tightened. The average proportion was 73.3% in the 10 months prior to the October 15 measures (December 2024 to September 2025), but it rose to 76.8% during the subsequent 10 months (October 2025 to July 2026). Since August, when the August 3 tax reform proposal was announced, the proportion has climbed further to 79%.

The trend intensifies for lower-priced apartments. The share of transactions at 600 million won or less surged from 17.0% during December 2024 to September 2025 to 25.0% starting in August 2026. In other words, one out of every four apartment sales in Seoul is now for 600 million won or less.

This shift is attributed to a large number of previously non-homeowners, worn out by rising rental prices, turning to purchase using low-interest policy loans for first-time home buyers at annual rates in the 3% range. Similarly, the share for the segment priced over 600 million won to 900 million won increased from 23.2% to 27.6% during the same period.

In contrast, the proportion of transactions over 900 million won has declined. The share for apartments priced over 900 million won and up to 1.5 billion won dropped from 33.1% to 26.3% since August. Because policy loan support is no longer available in this segment, the level of “available cash” among buyers has become a significant hurdle. For instance, even with the mortgage loan-to-value (LTV) ratio of 40% applied to a 900 million won apartment, buyers must come up with at least 540 million won on their own.

Transactions for ultra-luxury apartments have contracted even further. The proportion of deals for homes priced over 2.5 billion won fell from 8.3% (December 2024 to September 2025) to just 5.8% from August 2026. The market sentiment among buyers has weakened due to both increased property holding taxes following the tax reform and persistent loan restrictions.

Currently, the mortgage loan limit is up to 600 million won for properties priced at 1.5 billion won or less, up to 400 million won for those over 1.5 billion won and up to 2.5 billion won, and up to 200 million won for those exceeding 2.5 billion won.

According to the Korea Real Estate Board, apartment prices in Gangnam-gu and Seocho-gu have declined for eight consecutive weeks since the tax reform announcement. There are even urgent sales where prices have been slashed by more than 1 billion won below their peak. In contrast, the relatively low-priced districts of Nowon, Dobong, and Gangbuk continue to see price increases. However, even in these areas, the upward momentum is slowing due to price fatigue, and analysts predict that if large price cuts in Gangnam start leading to sales, the gap between high- and mid/low-priced markets will gradually narrow.

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