Seoul Land Transaction Permit Applications Rise for Second Month in October; Gangnam Prices Fall, Outlying Areas Rise

3,947 applications in October, up 8.2% from the previous month
At 44.4% of April's peak
Three Gangnam districts and Yongsan-gu post the largest increase, at 20.6%

The number of applications for land transaction permits for apartments in Seoul rose for the second consecutive month in October, signaling a recovery, but home price trends varied by area. Application prices fell sharply in the three Gangnam districts and Yongsan-gu, while prices continued to rise in the Hangang Belt and outlying areas.

Apartments and houses in Songpa-gu, Seoul. Photo by Kang Jinhyung

The Seoul Metropolitan Government said on Nov. 13 that 3,947 new applications for land transaction permits for apartments in Seoul were recorded in October. That was up 8.2% from September, marking a second consecutive monthly increase, but amounted to just 44.4% of the 8,886 applications recorded in April, the highest monthly total this year.

The three Gangnam districts and Yongsan-gu recorded 639 applications, up 20.6% from the previous month. The Hangang Belt had 860, up 9.7%, while the southwestern area recorded 775, up 9.5%. The Gangbuk area had 1,673, up 2.8%. By area, the shares of applications were 42.4% for the Gangbuk area, 21.8% for the Hangang Belt, 19.6% for the southwestern area, and 16.2% for the three Gangnam districts and Yongsan-gu.

In October, 195 applications were filed to defer the owner-occupancy requirement for homes with tenants, accounting for 4.9% of the 3,947 total land transaction permit applications. By area, there were 68 deferral applications in the Gangbuk area, 57 in the Hangang Belt, 44 in the three Gangnam districts and Yongsan-gu, and 26 in the four districts of the southwestern area.

Cumulative deferral applications from June through October totaled 1,000, or 4.9% of the 20,398 total applications over the same period. The monthly share of deferral applications has remained around 5%, below the average of 21.7% recorded from Feb. 27 to May 9, when applications were accepted for deferrals during the temporary suspension of the higher capital gains tax rate for owners of multiple homes.

Month-over-month change in prices submitted in land transaction permit applications, Seoul

In October, the requested prices in land transaction permit applications across Seoul rose 0.5% from the previous month. By area, prices continued to fall in the three Gangnam districts and Yongsan-gu, as they had the month before. Meanwhile, gains widened in the Hangang Belt, while the pace of increases slowed in outlying areas such as the Gangbuk and southwestern areas.

Prices in the three Gangnam districts and Yongsan-gu fell 0.92% from the previous month, with the decline deepening. In contrast, prices in the seven districts of the Hangang Belt rose 1.04%, with the increase widening as some complexes saw transactions at higher prices amid preferences for desirable locations and newer buildings.

Price increases slowed from the previous month to 0.52% in the 10 districts of the Gangbuk area and 0.89% in the four districts of the southwestern area. A Seoul Metropolitan Government official attributed this to "the price increases driven by the influx of buyers seeking mid- to lower-priced homes, as well as the cumulative impact of financial burdens."

An analysis of average application prices for 59-square-meter apartments found that prices in the southwestern area rose from 830 million won in August to 900 million won in September and 910 million won in October. In the Gangbuk area, they increased from 810 million won in August to 870 million won in September and 900 million won in October. In both areas, however, the pace of price increases slowed in October.

A Seoul Metropolitan Government official said, "After the government's tax reform proposal came out in August, many people took a wait-and-see approach, but transactions are gradually picking up again. Since land transaction permit applications lead to actual transactions later on, the number of actual transactions is also expected to gradually increase."

The official added, "Even so, the number of applications is only about half the level of more than 8,000 in April, and a sharp increase in prices will be difficult to expect at year-end due to the impact of banks' aggregate lending limits. With the November moving season also underway, experts forecast that real estate prices in the Seoul metropolitan area will rise by about 3% by the end of this year."

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