Gangnam, Seocho Home Prices Fall for 9th Straight Week... Listings in Seoul's Three Gangnam Districts Up 5,000 in Two Months [Real Estate A to Z]

Uncertainty over tax reform brings a wave of distressed listings
Home prices in Songpa fall for the fifth straight week
Listings in Gangnam's three districts rise by 5,700 in two months

Seoul apartment prices rose for the 87th consecutive week, marking their longest-ever winning streak, while prices in Gangnam-gu and Seocho-gu fell for the ninth consecutive week. The declines are believed to reflect a sharp increase in below-market quick-sale listings as the government’s Aug. 3 tax reform raised the burden of property taxes.

According to the Korea Real Estate Board’s weekly apartment market report released on the 11th, apartment sale prices in Gangnam-gu fell 0.34% week over week in the first week of this month, based on data as of the 5th. Prices in Gangnam-gu have declined for nine consecutive weeks since falling 0.02% in the second week of August. Seocho-gu also saw prices fall for nine straight weeks after turning down 0.04% in the second week of August. This week, prices fell 0.27% from the previous week. Songpa-gu recorded a 0.19% decline week over week, marking its fifth consecutive week of falling prices.

The ongoing price declines in Seoul’s three Gangnam districts are believed to be linked to the tax reform. The tax reform plan announced by the government in August includes a shift, starting in 2028, in the long-term special deduction for homeowners from a holding-period-based system to one based on the period of residence, as well as the introduction of a deduction cap. It also includes a temporary easing, starting in 2027, of the higher capital gains tax rates for owners of multiple homes. Although the plan has not yet been finalized, it is expected to increase the tax burden on owners of high-priced homes. As a result, large numbers of quick-sale listings are coming onto the market, particularly from older homeowners and owners of multiple homes in the Gangnam area.

For example, a 59-square-meter (24-pyeong) unit at Raemian One Bailey in Seocho-gu was listed for KRW 4 billion, about KRW 700 million below its most recent transaction price of KRW 4.7 billion in August. Two more units were listed at asking prices in the KRW 4.2 billion range. A 60-square-meter (25-pyeong) unit at Gaepo Jugong Complex 7 in Gangnam-gu was listed for KRW 2.8 billion, KRW 260 million below its most recent transaction price of KRW 3.05 billion in June. A 53-square-meter (22-pyeong) unit at Gaepo Jugong Complex 5 in Gangnam-gu was listed as a quick sale for KRW 3 billion, KRW 700 million below the highest asking price for a unit of the same size, at KRW 3.7 billion. Excluding direct transactions, the most recent sale was for KRW 3.45 billion in February.

The volume of listings on the market has also surged as large numbers of quick-sale properties have come up for sale. According to Asil, Seoul apartment listings totaled 22,182 on Aug. 3, when the tax reform plan was announced, and had risen to 27,896 as of the 8th, an increase of about 5,700 in two months. By district, Gangnam-gu listings rose from 9,453 to 11,727 as of the 8th, an increase of about 24%. Listings in Seocho-gu climbed from 7,630 to 9,701, while those in Songpa-gu rose from 5,099 to 6,468, increases of 31.8% and 26.8%, respectively.

However, experts said the likelihood of falling prices in Gangnam triggering declines across Seoul is limited. Seoul’s apartment market is moving in opposite directions as it divides between high-priced and mid- to lower-priced homes, amid tight lending restrictions and the impact of the tax reform. In particular, prices are surging as demand concentrates on mid- to lower-priced apartments costing KRW 1.5 billion or less in Seoul’s outlying areas.

Park Won-gap, senior real estate expert at KB Kookmin Bank, said, "The tax reform is weakening demand to move up to more desirable neighborhoods, so home prices in Gangnam may remain weak through next year." He added, "However, unlike in the past, the market is now segmented, so declines in Gangnam home prices are unlikely to spread immediately to the market for mid- to lower-priced homes costing KRW 1.5 billion or less."

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