"More Listings Will Keep Coming" Is This the Time to Go On-Site? Exit Route Opens for Multi-homeowners With Leased Homes [Real Estate AtoZ]

Sales of Tenanted Homes Enabled by Supplementary Measures
Listings Expected to Keep Coming After the Holiday

Yonhap News Agency

After the government announced supplementary measures related to the end of the temporary suspension of the heavy capital gains tax on multiple-home owners, the number of apartment listings in Seoul has increased. As properties with existing tenants can now also be sold, multiple-home owners who have been given an exit route are putting their homes on the market. Once the Lunar New Year holiday is over, the pace of new listings is expected to pick up in earnest.

Number of Seoul apartment listings continues to rise

According to real estate big data platform Asil, the number of apartments for sale in Seoul stood at 63,745 as of February 13. This represents an increase of 4,139 listings (6.9%) compared with February 9, the day before the government announced its plan to supplement the heavy capital gains tax on multiple-home owners, when there were 59,606 listings. Compared with January 23, when the president made remarks about ending the temporary suspension of the heavy tax on multiple-home owners and when there were 56,219 listings, the number is up 13.3%.

On February 12, the government unveiled its "Plan to End the Temporary Suspension of the Heavy Capital Gains Tax on Multiple-Home Owners and to Promote Supplementary Measures." It will end the temporary suspension of the heavy capital gains tax on multiple-home owners as scheduled on May 9, but will grant capital gains tax relief if the balance payment and registration are completed within four months for existing regulated areas such as the three Gangnam districts and Yongsan District, and within six months for newly designated regulated areas.

The government also decided to defer the owner-occupation requirement for homes with existing tenants until the expiration date of the current lease contract. Owners will be allowed to move in by February 11, which is within two years from the date of the announcement. The requirement to file a move-in report within six months when taking out a mortgage loan has also been eased.

As a result, analysts say that an exit route has been opened for multiple-home owners. In reality, the increase in listings, which had been concentrated in the three Gangnam districts (Gangnam, Seocho, and Songpa), is now spreading across all of Seoul. Among the 25 districts, the largest increases were seen in Seongbuk District (11%) and Seongdong District (11%), followed by Dongjak District (10.8%), Gangdong District (10%), and Dongdaemun District (9.4%).

Seoul apartment price growth slows... Experts say "more listings expected"

Price increases are also showing signs of slowing. According to the Korea Real Estate Board, the apartment price growth rate in Seoul for the second week of February was 0.22%, down 0.05 percentage points from the previous week (0.27%). By area, non-Gangnam or outer districts, where there are relatively more mid- to low-priced listings, showed stronger gains. Gwanak District (0.40%), Seongbuk District (0.39%), and Guro District (0.36%) recorded relatively high growth rates.

Experts predict that as multiple-home owners have more incentive to accelerate sales, market transactions will also gain momentum. Ham Youngjin, head of the Real Estate Research Lab at Woori Bank, said, "These supplementary measures, which open an 'exit route' for multiple-home owners who have wanted to sell but could not because their properties were occupied by tenants, will help bring additional listings to the market," adding, "As listings increase, buyers' bargaining power in transactions could be strengthened."