Tenant-Occupied Fire Sales Likely to Surge Before May... Listings Could Reach 90,000 Next Month [Seoul Flooded with Listings]

Apartment listings in Seoul have surpassed 80,000 for the first time this year, prompting some analysts to say the market is already on a countdown to 90,000. Since 2023, the only time Seoul apartment listings exceeded 90,000 was in February and March last year, when the market was unsettled ahead of the presidential election. With the reinstatement of heavier capital gains tax on multi-home owners scheduled for May 10, many in the market believe more listings will come onto the market through early to mid-April.
"More tenant-occupied fire sales may come to market"
According to the real estate industry on the 23rd, apartment listings in Seoul have been rising sharply since January 24. That was the day after President Lee Jae-myung stated, "We are not considering any extension of the exemption from heavier capital gains tax on multi-home owners." On January 24, there were 56,373 apartment listings in Seoul, and the number has been increasing rapidly week by week since then.
Market participants expect listings to continue piling up through early to mid-April. To avoid the heavy capital gains tax on multiple home owners that takes effect on May 10, sellers need to complete apartment transactions after obtaining approval under the land transaction permission system. This approval typically takes about 15 business days from application, which, counted backward, points to mid-April as the effective deadline.
If the current pace of increase continues, the number of listings could even exceed 90,000. Using a weighted-average method that gives more weight to recent data, the weekly growth rate in listings from January 24 to March 21 comes out to 4.2%. Applying this rate, apartment listings in Seoul would reach around 83,400 on March 28, about 86,900 on April 4, and roughly 90,500 by April 11. A real estate expert who requested anonymity commented, "The figures will not be exact, but they do show the general trend," adding, "Some tenant-occupied fire-sale listings could pop up at the very end."
Reactions in the market are mixed. Some argue that, given how sharply listings have already increased, it will be difficult for supply to grow much further. In fact, as of the 23rd, apartment listings in Seoul stood at 77,515, slightly down from the previous day after some adjustment.
Even so, many expect the upward trend in listings to continue at least through early April.
Property holding tax burden also a factor... "Market feels different from usual"
The fact that June 1 is the base date for assessing property holding tax is also expected to contribute to the increase in listings. This year, the officially assessed value of multi-unit housing in Seoul (apartments, row houses, and multiplex units) rose 18.67%, the third-largest increase on record. In the Gangnam 3 Districts (Gangnam-gu, Seocho-gu, and Songpa-gu) and the Han River Belt, officially assessed values all jumped by more than 23%. This suggests that, beyond capital gains tax, additional listings may come from owners feeling the heavier annual property tax burden. Woo Byung-tak, a specialist at Shinhan Premier Pathfinder at Shinhan Bank, explained, "In ordinary years without the event of heavier capital gains tax on multi-home owners, selling pressure typically continued until the end of May, but this year, listings that anticipate the reinstatement of heavy taxation have effectively been brought forward," adding, "The increase in listings is likely to continue until mid-April."
However, it is unclear whether fire-sale listings will pour out as they did in February and March. A licensed real estate agent near the Han River Belt said, "Rather than deep fire sales, listings are coming out at what we would consider normal prices," and added, "Sellers are in a 'if it sells, fine; if not, so be it' mindset, so they are not in an extremely urgent situation."
Some also warn that waiting too long could mean missing out on a purchase altogether. A real estate industry official noted, "If you hold out until the very end only looking for fire-sale deals, you may end up failing to buy anything," and advised, "Instead of focusing solely on distressed sales, buyers should look carefully for properties that match their own conditions."
kjh0109@fnnews.com Kwon Jun-ho Reporter