Even Those Who Want to Sell Can't Find Buyers... The Reality of Gangnam Trapped by Regulations

[The Financial News] As the May 9 expiration of the government's temporary suspension of heavier capital gains taxes on multi-homeowners approaches, the pace at which apartment listings are being absorbed is diverging sharply across Seoul. The policy effect the government intended — easing supply and demand through more listings — is working in the Han River Belt, while Gangnam and other areas burdened by loan and residency rules are seeing listings pile up without leading to transactions, deepening a policy imbalance.
On the 27th, Yang Ji-young, a real estate expert advisor at Shinhan Premier Pathfinder, analyzed data from the real estate big-data platform Asil and actual transaction records from MOLIT. The results showed that the listing absorption rate in the seven districts along the Han River Belt — Seongdong, Mapo, Gwangjin, Yeongdeungpo, Dongjak, Yangcheon and Gangdong — reached 36.9% in March. That was 2.2 times higher than the 16.6% absorption rate in the four core districts of Gangnam, Seocho, Songpa and Yongsan.
The "listing absorption rate" refers to the share of new listings that were actually sold during a given period. It is a measure of how effectively the government's listing-inducement policy has translated into easing supply-demand pressure in the market. In February, the two regions added roughly 5,500 to 5,600 new listings each, but the Han River Belt recorded more than twice as many completed transactions. Yang explained, "Sellers on both sides were eager to sell, but the Han River Belt was the area where the policy effect actually took hold."
By district, four of the top five areas for March absorption rates were in the Han River Belt. Yangcheon District ranked first at 54.4%, followed by Yeongdeungpo at 50.7%, Mapo at 46.3% and Dongjak at 44.0%. In particular, 5.4 out of every 10 new listings in Yangcheon District were sold in the same month.
By contrast, the Gangnam area struggled. Gangnam District's March absorption rate stood at just 13.7%, while Seocho District posted 7.3%, the lowest among the 11 districts analyzed. Seocho District also fell below its February rate of 7.5%, showing that new listings are becoming harder to sell over time.
The Han River Belt also outperformed Gangnam in "inventory turnover," which measures how quickly existing listings are sold. As of March, the turnover rate in the Han River Belt was 7.22%, 3.1 times faster than the 2.31% recorded in the four core districts. This suggests that the Han River Belt is a virtuous market where listings are absorbed quickly, while Gangnam is a stagnant market where inventory moves slowly.
As of April 20, listing inventory had edged down from the end of March — by 4.3% in the Han River Belt and 1.2% in the Gangnam three districts — but compared with the end of January, listings were still up by around 40%.
Yang said, "Supply has increased due to the temporary suspension of heavier capital gains taxes, but loan rules and residency restrictions are suppressing demand." He added, "After May 9, whether the government signals a property tax overhaul or additional regulations will determine whether multi-homeowners accelerate sales or pull listings back and shift to long-term holding."
ming@fnnews.com Jeon Min-kyung Reporter