"Officially Assessed Prices" Likely to Rise Despite Forecast Freeze in Market-Price Reflection Rate Next Year [Year-End Real Estate Outlook]

Seoul apartment prices up 8.32% from January to September
Officially assessed prices rise as actual transaction prices surge
Northern Seoul areas lead the gains

The government has begun the process of determining officially assessed prices for calculating property taxes next year. In Seoul, many areas saw apartment prices rise this year, following last year’s trend, so officially assessed prices are also expected to continue climbing. The government and National Assembly had initially planned to introduce a five-year roadmap to make the forecast for the rate at which officially assessed prices reflect market prices more predictable, but they have yet to finalize the relevant legal amendments. When the government announced its tax reform plan in August, it conducted simulations based on the rate remaining at this year’s level of 69%. As a result, it is expected to be difficult to apply a higher rate in the actual calculations.

According to the Korea Real Estate Board’s housing price trends survey on Nov. 2, Seoul apartment prices rose 8.32% from January to September this year, nearly matching last year’s annual increase of 8.98%. Although the rate at which officially assessed prices for apartment complexes and other multi-unit housing reflected market prices was frozen at around 69%, the previous year’s average, a sharp rise in actual transaction prices pushed officially assessed prices up 18.67%, the highest increase since 2021. In the Gangnam area and neighborhoods near the Han River, officially assessed prices rose by 20% to 30%, driven by sharp price increases in large complexes and properties slated for reconstruction.

Officially assessed prices serve as the basis for calculating property taxes and comprehensive real estate holding taxes. In response to criticism that they diverged too widely from market prices, the Moon Jae-in administration decided to raise them gradually. However, after criticism that the tax burden was excessive, the Yoon Suk Yeol administration rolled them back to 2020 levels. The Lee Jae-myung administration has maintained them at the same level.

Apartment complexes and homes in Songpa-gu, Seoul. Reporter Kang Jinhyeong.

As Seoul apartment prices have continued to rise this year, officially assessed prices are expected to increase even if the rate at which they reflect market prices is frozen. However, the pattern is expected to differ from last year. Regulations that set different loan limits according to home prices have made the relatively less expensive northern areas of Seoul the main driver of price gains. By district, Seongbuk-gu posted the largest increase, rising 14.69% from the start of the year through September.

Non-Gangnam districts, including Gangseo (12.37%), Seodaemun (12.18%) and Guro (11.79%), also saw particularly strong gains. The three Gangnam districts and Yongsan-gu, which led the rise last year, have instead recorded declines over the past three to four months and rank among the four districts with the smallest gains. At ultra-luxury complexes such as the Hyundai Apartment complex in Apgujeong, transactions at prices tens of billions of won below previous levels are not uncommon.

The government will hold a public hearing on officially assessed prices and convene the Central Real Estate Price Disclosure Committee this month to determine the rate at which officially assessed prices will reflect market prices next year. It had initially planned to release a roadmap setting the rate for five-year periods by the end of this year. However, as the relevant bill has yet to be passed, the government is expected to announce a rate that will apply for one year in 2027.

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