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 permits to trade land for apartments in Seoul rose slightly last month for the first time in five months. The prices stated in the applications also increased 1.43% from the previous month.

According to the Seoul Metropolitan Government on October 15, the number of new applications for land transaction permits for apartments in Seoul reached 3,678 in September, up 24.1% from 2,963 the previous month. The figure had declined for four consecutive months from April this year, but rebounded in September.

However, the number remains far below the levels recorded from January to July this year. It was 58.7% lower than in April, when transactions were brisk, with 8,896 applications. 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 Holding 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 tax reform measures are having an effect. The trend needs to be monitored."

By region, applications for land transaction permits increased in all four areas last month. Gangnam's three districts and Yongsan-gu recorded the largest increase, at 51.5% from the previous month. The Southwest area and the Han River Belt also rose 30.4% and 29.2%, respectively. The Gangbuk area had the most applications, at 1,646, but its increase of 13.0% was relatively modest.

By region, the shares of applications were 44.8% for the Gangbuk area, 21.2% for the Han River Belt, 19.5% for the Southwest area, and 14.6% for Gangnam's three districts and Yongsan-gu. The Gangbuk area'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 for a deferment of the owner-occupancy 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, there were 69 applications across the seven districts in the Han River Belt, 68 across the 10 districts in the Gangbuk area, 40 in Gangnam's three districts and Yongsan-gu, and 21 across the four districts in the Southwest area.

The share of applications for deferment rose from 5.6% to 8.9% in the Han River Belt and from 5.4% to 7.4% in Gangnam's three districts and Yongsan-gu. However, the rate of applications for owner-occupancy deferment remains below the average of 21.7% during the period from February 27 to May 9, when applications were accepted for a deferment of the higher capital gains tax rate on multiple-home owners.

The Seoul Metropolitan Government said applications for owner-occupancy deferment could increase going forward, as the scope of recognized lease renewal contracts has been expanded. Following an amendment to the Enforcement Decree of the Act on Report on Real Estate Transactions, Etc., on October 1, the owner-occupancy requirement may be deferred through the term of lease renewal contracts that meet certain requirements. The deadline to apply for an owner-occupancy deferment is December 31, 2027.

Last month, the prices stated in applications for land transaction permits across Seoul rose 1.43% from the previous month.

Prices in Gangnam's three districts and Yongsan-gu fell 0.32% from the previous month, while those in the seven districts of the Han River Belt rose 0.19%, with the upward trend slowing.

Prices in the 10 districts of the Gangbuk area and the four districts of the Southwest area rose 2.07% and 2.45%, respectively, from the previous month. The Seoul Metropolitan Government attributed the increases to "an inflow of genuine demand, primarily for mid- to low-priced homes that are relatively more accessible to borrowers."

Since all of Seoul was designated 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 across the city's 25 autonomous districts.

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