"If You Go In Unaware, You'll Get Burned"... Fake 'Urgent Sales' Flood Apartment Market

[Financial News] Since January 23, when President Lee Jae-myung declared the end of the grace period for heavier capital gains tax on multiple-home owners, so-called "urgent sale" listings have begun to appear even in outer areas of Seoul such as Gangbuk District in the north of the city. However, many sellers first post their homes and then raise the price by tens of millions of won to as much as 100 million won, or set asking prices above the going market rate while still labeling them as urgent sales. As these nominal fire sales increase, there are growing concerns that would-be first-time buyers could be harmed.
Roughly two weeks after the government moved to draw more properties onto the market on the 10th, listings have increased in Seoul’s outer districts. Descriptions now feature phrases like "super-urgent sale," "move-out date fixed for newlyweds," and "negotiable." Yet a closer look at prices for so-called urgent listings in large apartment complexes shows that sellers are still deeply conflicted about how far to cut.
In Doosan We’ve Treziem (1,370 units) in Mia New Town in Gangbuk District, an 84-square-meter unit labeled as an urgent sale was listed at 900 million won on January 20, but by January 31 the asking price had climbed to 1 billion won, an increase of 100 million won. Another 84-square-meter unit that went on the market for 900 million won on January 23 saw its price raised twice, by 50 million won each on January 26 and 31, and is now listed at 1 billion won. The issue is that over the past two to three years, all recent transactions for the same-sized units in this complex have closed in the 700 million to 800 million won range. The peak price was 1.06 billion won in August 2021, but since the market has yet to recover that boom-time high, sellers appear to be preemptively lifting their asking prices in anticipation of stronger buying interest.
A similar pattern is visible elsewhere. In Raemian Jangwi First High (1,562 units) in Seongbuk District, the asking price for an 84-square-meter unit rose from 1.15 billion won on January 27 to 1.2 billion won on February 2, an increase of 50 million won. At DMC Raemian Classis (1,114 units) in Seodaemun District, the asking price for a 114-square-meter unit advertised as a "recommended urgent sale" was recently raised from 1.2 billion won to 1.3 billion won, up 100 million won. Smaller, more accessible units show the same trend: in the Ssangyong complex (1,352 units) in Dobong District, a 59-square-meter unit that was listed at 820 million won on January 13 is now being offered for 850 million won.
Meanwhile, as President Lee and the government have repeatedly stepped up pressure on multiple-home owners, the number of listings in Seoul has increased by 6.03% compared with January 22. For these properties to be absorbed as owner-occupied homes by people with no home or just one home, prices would need to fall further, but so far that adjustment has been limited. Nam Hyuk-woo of the Woori Bank Real Estate Research Institute noted, "Unlike in Gangnam, where sale prices have risen sharply, in areas that have not yet recovered their 2021 peak, it is difficult to see genuinely urgent sales with steep discounts." He added, "Even when they do sell, owners want to close at prices above the most recent market levels, and that desire is reflected in their asking prices."
ming@fnnews.com Jeon Min-kyung Reporter