Seoul apartment transactions rise for a third month... Listings down 2.8% in 10 days as fire sales disappear

As listings were rushed onto the market to avoid heavier capital gains tax, Seoul apartment transactions increased for the third consecutive month. However, as deals were concluded quickly, mainly for fire-sale listings, the number of properties on the market has clearly declined.
According to the Ministry of Land, Infrastructure and Transport’s actual transaction price disclosure system on the 5th, the number of Seoul apartment sales in February was 5,851, up 6.5% from the previous month’s 5,496. This marked three straight months of growth since December last year. Transactions for March currently stand at 3,660 and the final figure is expected to be higher.
Transaction volume hit a yearly low of 3,519 in November last year, then recovered to 4,918 in December and 5,496 in January this year, rising about 66% from the trough. Even so, it is still 14.2% lower than the same month a year earlier, when there were 6,818 deals, and less than half the 12,611 transactions recorded in June last year.
A key variable is the land transaction permission system. To sign contracts by May 9, the cutoff date for exemption from heavier capital gains tax, buyers must first obtain approval under this system, which takes roughly two weeks. Because applications need to be filed by mid-April, a last-minute rush of deals cannot be ruled out.
Listings that came onto the Seoul apartment market to avoid heavier capital gains tax have in effect been exhausted. According to the Asil real estate big data platform, there were 76,757 Seoul apartment listings as of the day, down 2.8% from 10 days earlier. Supply fell in major areas including Gangnam District, which saw a 9.5% drop, as well as Nowon District (down 5.0%) and Gangseo District (down 4.1%). After peaking at 80,080 on March 21, when the number of listings surpassed 80,000, the downward trend has been pronounced.
Park Won-gap, Chief Real Estate Expert Commissioner at KB Kookmin Bank, stated, "With tighter lending regulations reducing buyers’ purchasing power, a slowdown in transactions is inevitable." He added, "Some listings from owners of a single high-priced home or from rental business operators may still come onto the market, so the extent of any sharp decline in deals will depend on future supply and demand conditions."
en1302@fnnews.com Jang In-seo Reporter