It Was Said to Be Easier to Give Up... The Twist Behind a Large Apartment Complex With No Rental Listings

[The Financial News] As the May 9 deadline approached for the temporary exemption from the heavy capital gains tax rate for owners of multiple homes, rental listings had become extremely scarce in some apartment complexes in Seoul. Now, however, those listings are rising again. The shift appears to reflect landlords who abandoned plans to sell and chose to "hold out," instead looking for tenants.
According to the industry on the 27th, a growing number of Seoul landlords are turning homes originally listed for sale into jeonse or monthly rental listings. A licensed real estate agent in Nowon-gu, Seoul, said, "Those who were not very determined to sell still are not lowering their asking prices. Some are even pulling listings and switching the transaction type to jeonse or monthly rent."
The change in the market can be seen in Gangbuk District's SK Bukhansan City Apartment Complex, which ranks first in Seoul this year with 121 sales transactions. A little over a month ago, it had no jeonse listings and just one monthly rental listing. Now, it has four jeonse listings and nine monthly rental listings. In total, rental listings have increased by 1,200 percent. By contrast, sales listings fell 50.6 percent, from 87 to 43. The phrase "multiple-home listing," which had often appeared in listing descriptions, has almost disappeared.
Hanshin-Hanjin Apartment in Seongbuk District, the second-ranked complex by transaction volume, also saw jeonse listings jump sharply from zero to seven. In Sanggye Jugong Apartment Complex 6 in Nowon-gu, jeonse listings rose from zero to nine, while monthly rental listings increased from 16 to 43. Gwanak Dream Town Apartments in Gwanak District also saw rental listings rise from one to nine. Even though the deadline for applying for the land transaction permission system was extended to May 9, some landlords appear to have given up on selling early.
Yang Ji-young, a senior researcher at Shinhan Premier Pathfinder, said, "If you look at the prices of the listings that remain after the bargain-priced homes have been cleared out, they are much higher than recent transaction prices." She added, "This suggests that these owners are not in a hurry to sell and have decided to hold out after May 9."
By district, Seocho District saw the biggest increase in rental listings, up 18.7 percent from a month earlier. In total, seven districts saw more listings, including Seongbuk District (15.4 percent), Jongno District (12.6 percent), Nowon-gu (7.4 percent), and Jung District, Seoul (6.5 percent). Seocho District's strong increase was partly driven by new listings from the reconstruction of Banpo Jugong Apartment Complex 1 (THE H Class+est), but there were also notable changes in major existing complexes. RAEMIAN ONE PENTAS saw rental listings rise 78.6 percent, from 75 to 134, while Banpo Raemian Xi Park increased 32.2 percent, from 68 to 90.
Rental supply may edge up slightly even after May 9, but it is unlikely to lead to lower jeonse or monthly rent prices. Yang said, "Seoul has only 200 move-in units this month and 600 next month, so the city is chronically short of new housing supply." She added, "Rental supply is unlikely to keep rising because of owner-occupancy requirements, while demand continues to grow. It is therefore hard to expect prices to fall."
ming@fnnews.com Jeon Min-kyung Reporter