Seoul Apartment Land Permit Applications Rebound for First Time in 5 Months; Prices Up 1.43%

September Announcement of Comprehensive Real Estate Tax Relief May Have Had an Impact
Applications Surged 51.5% in the Three Gangnam Districts and Yongsan-gu
Growth Slowed in the Gangbuk Area... Prices Rose in Outlying Areas

A view of apartment buildings in the Gangnam area from the Sky Observatory at Lotte World Tower in Songpa-gu, Seoul. Photo by Yoon Dongju/doso7@

The number of new applications for land transaction permits for apartments in Seoul edged up last month for the first time in five months. The prices listed in the applications also rose 1.43% from the previous month.

According to the Seoul Metropolitan Government on October 14, 3,678 new applications for land transaction permits for apartments in Seoul were filed in September, up 24.1% from 2,963 the previous month. The number had declined for four consecutive months from April this year, but rebounded in September.

However, the figure remains much lower than the levels recorded from January to July this year. It was 58.7% below the 8,896 applications filed in April, when transactions were brisk. From October 20 last year through the end of September this year, a total of 59,619 applications were filed. Of these, 58,170, or 97.6%, were processed.

The Seoul Metropolitan Government said the increase in applications may have been influenced by the government’s announcement on September 1 of measures to ease the burden of the comprehensive real estate tax. The city said, “However, it is difficult to conclude from the increase in applications alone that the housing market as a whole is recovering or that the tax reforms are having an effect. The trend needs to be monitored.”

A closer look shows that applications for land transaction permits increased across all four regions last month. Gangnam’s three districts and Yongsan District recorded the largest increase, at 51.5% from the previous month. The southwestern region and the Hangang Belt also rose 30.4% and 29.2%, respectively. The Gangbuk region had the most applications, at 1,646, but its growth rate was relatively low, at 13.0%.

By region, the shares of applications were 44.8% for the Gangbuk region, 21.2% for the Hangang Belt, 19.5% for the southwestern region, and 14.6% for Gangnam’s three districts and Yongsan District. The Gangbuk region’s share rose for four consecutive months, from 40.7% in April to 49.2% in August, but fell 4.4 percentage points from the previous month in September.

There were 198 applications to defer the actual-residence requirement for “homes with tenants,” accounting for 5.4% of all applications. This was up 45.6% from 136 the previous month, while the share of all applications also edged up from 4.6% to 5.4%.

By region, the applications comprised 69 in the Hangang Belt’s seven districts, 68 in the Gangbuk region’s 10 districts, 40 in Gangnam’s three districts and Yongsan District, and 21 in the southwestern region’s four districts.

The share of applications for deferral rose from 5.6% to 8.9% in the Hangang Belt and from 5.4% to 7.4% in Gangnam’s three districts and Yongsan District. However, the rate of applications to defer the actual-residence requirement remains below the average of 21.7% during the period from February 27 to May 9, when applications were accepted to defer the capital gains tax surcharge for owners of multiple homes.

The Seoul Metropolitan Government said applications to defer the actual-residence requirement may increase going forward, as the scope of lease renewal contracts that qualify for recognition has been expanded. Following an amendment to the Enforcement Decree of the Act on Reporting and Other Matters Related to Real Estate Transactions on October 1, the actual-residence requirement will be deferred through the term of lease renewal contracts that meet certain conditions. Applications for deferral can be filed through December 31 next year.

The prices listed in applications for land transaction permits across Seoul filed last month rose 1.43% from the previous month.

Prices in Gangnam’s three districts and Yongsan District fell 0.32% from the previous month, while those in the Hangang Belt’s seven districts rose 0.19%, slowing their upward trend.

Prices in the Gangbuk region’s 10 districts and the southwestern region’s four districts rose 2.07% and 2.45%, respectively, from the previous month. The Seoul Metropolitan Government attributed the increases to “inflows of real demand, mainly for mid- to lower-priced homes with relatively easier access to loans.”

Since Seoul was designated in its entirety as a land transaction permit zone on October 20 last year, the Seoul Metropolitan Government has been temporarily releasing monthly data on land transaction permit applications and price changes in the city’s 25 autonomous districts.

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