"Won't Sell at That Price" Owners Pull Listings as Seoul Apartment Supply Falls to 70,000

As the reinstatement of heavier capital gains tax on multi-home owners on May 9 draws near, Seoul apartment listings for sale are falling rapidly. Listings that once topped 80,000 dropped by more than 1,400 in a single day and are now barely holding above 70,000. In particular, supply has plunged in the three Gangnam districts (Gangnam, Seocho and Songpa), where demand for owner-occupied homes is strong, as well as in outer areas of Seoul.
According to the real estate platform Asil on the 4th, Seoul apartment listings stood at 70,897 as of the 2nd, down 1,418 from 72,315 the previous day. Excluding this case, there has been only one other instance this year in which apartment listings fell by more than 1,400 in a single day. The difference is especially clear compared with late March, when listings were flooding the market. On March 21, Seoul apartment listings stood at 80,080, nearly 10,000 more than on the 2nd of this month. It was the first time since Feb. 26 that listings fell into the 70,000 range. Even on the 4th, Seoul apartment listings remained on a downward trend at 70,251.
The recent sharp decline in Seoul apartment listings is being driven by owners who had been considering a sale until the last minute, but are now pulling their homes off the market ahead of the return of heavier capital gains tax on multi-home owners. With time running short to sell apartments and buyers continuing to push asking prices lower, more sellers are saying, "I won't sell at that price."
Another factor is that many transactions have taken place in areas with strong demand for owner-occupied homes. Nam Hyuk-woo, a researcher at Woori Bank WM Business Strategy Department, said, "In areas where people buy to live, the gap between jeonse and sale prices is not very large," adding, "That allows tenants to make purchase decisions more quickly." In other words, deals have been concentrated in Seoul's lower-priced outer areas, which has contributed to the decline in listings.
The drop in listings is especially noticeable in the three Gangnam districts and in outer areas such as Nowon District, Dobong District and Gangbuk District, where demand for owner-occupied homes is high. In Gangnam District, apartment listings on the 4th stood at 10,073, just short of falling below 10,000. Seocho-gu also slipped below 9,000 for the first time since March 12, recording 8,929. The same trend is visible in Seoul's outer districts. Apartment listings in Nowon District and Dobong District hit three-month lows of 4,895 and 2,342, respectively, while Gangbuk District recorded 1,020, the lowest level in three years.
Some in the market believe listings could fall another 20% to 30% from current levels. Others, however, say supply could rise again depending on tax reform, interest rates and the direction of government policy.
kjh0109@fnnews.com Kwon Jun-ho Reporter