Multi-homeowners Shift From Holding Out to Rushing to Sell
"Please Sell by May 8" in Gaepo-dong
Bulk Text Messages Sent to Agencies
"A landlord who owns multiple homes said he was in a hurry and put the property on the market as an ultra-quick sale at 120 million won below the asking price, and the deal was closed the same day," said realtor A in Suseo-dong, Gangnam District.
"A landlord who owns an apartment in Raemian Blestige in Gaepo-dong sent out a mass text message saying, 'Please sell it by May 8,' and about 50 nearby real estate agencies are advertising it," said realtor B in Daechi-dong, Gangnam District.
As President Lee Jaemyung continues to put pressure on owners of multiple homes and vows to crack down on real estate speculators, homeowners in Gangnam District, Seoul, the main target area, are starting to be spotted one by one putting their homes up for quick sale as of the 4th. After President Lee reiterated that the grace period for heavier capital gains tax on multiple-home owners will end on May 9, some of these owners appear to be "waving the white flag." There are also projections that more properties will come onto the market, as the government is pushing a plan to allow several months of leeway until transaction completion in order to prevent market turmoil.
According to information confirmed by The Asia Business Daily on this day, ultra-quick sale listings have begun to appear in Gangnam, Seoul, and are being sold immediately. An apartment in Kkachimaeul in Suseo-dong with an exclusive area of 49 square meters was sold for 120 million won below the asking price. The asking price was 1.55 billion won, but it was snapped up at 1.43 billion won. A nearby real estate industry official said, "There is a mood where properties with reduced prices are starting to come out one by one."
In Gaepo-dong, a text message asking nearby real estate agencies to sell a Raemian Blestige apartment with an exclusive area of 113 square meters for 4.3 billion won was circulated. The lowest asking price for this apartment is 4.35 billion won, and the owner is asking for it to be sold 50 million won cheaper than that.
This atmosphere is related to the fact that since last weekend, President Lee has been posting messages on X (formerly Twitter) targeting owners of multiple homes on a daily basis. By stressing that "selling is better than holding out, and selling early is more advantageous than selling late," some landlords are starting to abandon their holdout stance. Realtor C in Seocho-dong, Seocho District, said, "With the heavier capital gains tax for multiple-home owners being reinstated and talk that property holding taxes will also be strengthened going forward, these owners are doing the math and putting properties on the market if they think they will take a loss," adding, "There is also strong wait-and-see demand from buyers who tell us, 'If a quick-sale property comes out, don't post it online, just let us know immediately.'"
The likelihood of additional properties being released onto the market has increased further as the government proceeds with a plan to end the grace period for heavier capital gains tax on owners of multiple homes, while responding to claims that "it is difficult to sell a home within three months" by pushing to extend the deadline for completing transactions by up to six months.
Ham Youngjin, head of Woori Bank Real Estate Research Lab, explained, "The government is sending a consistent signal about strengthening taxation on non-owner-occupied properties and owners of multiple homes, and we believe this will influence these properties to come onto the market," adding, "With the Lunar New Year holidays and all, if the period for paying the balance or the timing of registration of title transfer is deferred, we could see stronger willingness among owners to sell their homes."
However, despite some quick-sale properties, on the ground the prevailing view is that there has been no major change even with the reinstatement of heavier capital gains tax, with comments such as "landlords are not lowering their asking prices." The strong perception that "holding out" worked during the previous Moon Jaein administration and will work under the current administration as well underpins this stance. An employee at a real estate agency in Dogok-dong, Gangnam District, said, "During the Moon Jaein administration, people who were easily frightened sold everything, and now there are no such people," adding, "Having gone through that entire process, there are not many who will be shaken by what the president says now, and there will not be major agitation in Gangnam, or even in the outer areas of Seoul."
There are also voices saying that measures are needed for cases where there is an existing tenant and the owner wants to sell but cannot. As all of Seoul has been designated as a land transaction permission zone, buyers are subject to an owner-occupation requirement. Those wishing to purchase must submit a confirmation that the existing lease contract has ended and that the tenant will vacate in order to buy the home. One option is for the current landlord to offer a premium to induce the tenant to move out, but if the tenant still refuses, the property cannot be put on the market.
Yoon Sumin, real estate specialist at NH Nonghyup Bank, said, "There may be fairness issues, but if measures are put in place to allow transactions within land transaction permission zones to proceed on the condition that the buyer actually occupies the home after the lease expires, such as by creating regulatory exceptions, more properties owned by multiple-home owners will be released," adding, "The biggest factor behind the current market imbalance is the lack of listings, and if exceptions are introduced to the land transaction permission zone regulations, it could also curb unilateral hikes in asking prices by sellers."
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