[비즈한국] Seoul’s apartment transaction prices have seen their largest increase in five years. While the upward price trend has spread across the entire city, transaction volume has significantly declined. Amidst this cooling market, the share of apartment sales priced at 1.5 billion won or less has actually risen. Recently, nearly 80% of all transactions have been concentrated in the under 1.5 billion won range, signaling a clear shift toward lower and mid-priced housing.
According to the Korea Real Estate Board, the actual transaction price index for Seoul apartments reached 203.5 in June, marking a 2.50% increase from the previous month. This is the largest monthly rise in five years, surpassing the 2.44% recorded in June 2021 during a period of surging house prices. Compared to the same month last year, prices rose by 13.79%. The index for Seoul apartments accelerated its growth, moving from 195.7 in March to 195.9 in April, 198.6 in May, and 203.5 in June.
The rising trend in Seoul apartment prices was not limited to the Gangnam area. In June, actual transaction prices for apartments in the northeastern region rose by 2.74% from the previous month, and in the northwestern region by 2.73%. These figures exceed the 2.52% rise in the southeastern region, which includes the Gangnam, Seocho, Songpa, and Gangdong districts. The southwestern region also saw a 2.41% increase, while the downtown area rose by 0.57%. Although the magnitude of the increases varied, transaction prices rose across all regions of Seoul.
Conversely, transaction volumes have shrunk while the share of low-to-mid-priced sales has grown. An analysis of Ministry of Land, Infrastructure and Transport transaction data by BizHankook shows that there were 5,276 apartment sales in Seoul in June, a decrease of 3,673 (41.0%) from the previous month. During the same period, the share of transactions priced at 1.5 billion won or less rose by 3.8 percentage points, from 72.5% to 76.3%. The share of low-to-mid-priced housing, which had dipped in April and May due to an increase in high-end property transactions ahead of the end of the capital gains tax relief for multi-home owners, has surged once again in June.
In reality, Seoul apartment transactions were concentrated in districts with relatively lower house prices. In June, Nowon-gu recorded the highest number of apartment transactions at 675. It was followed by Gangseo-gu (368), Seongbuk-gu (313), Guro-gu (296), and Dobong-gu (279). In these five districts, properties priced at 1.5 billion won or less accounted for more than 90% of all transactions. In Nowon-gu and Dobong-gu, every recorded transaction was for 1.5 billion won or less.
This trend appears to be continuing in July. As of the 23rd, 4,493 out of 5,594 Seoul apartment transactions in July, or 80.3%, were for properties priced at 1.5 billion won or less. This is about 4 percentage points higher than in June, meaning roughly four out of every five transactions involved homes priced under 1.5 billion won. However, since contracts signed in July can be reported until the end of the month, the total transaction volume and the breakdown by price range may change.
First-time homebuyers were also particularly active in low-to-mid-priced areas. An analysis by Zigbang using Supreme Court registry data shows that there were 7,547 first-time purchases of collective buildings (such as apartments, row houses, and officetels) in Seoul in July, a 4.7% increase from the previous month and the highest figure since November 2021. People in their 20s and 30s accounted for 68.8% of the total, with Eunpyeong-gu recording the highest number of purchases at 841, followed by Nowon-gu (607) and Gangseo-gu (526).
Meanwhile, the rise in jeonse (long-term deposit rental) prices is another variable affecting the sales market. In June, the actual transaction price for Seoul apartment jeonse rose by 1.28% from the previous month, marking an 11-month consecutive streak of increases since August of last year. The month-over-month growth rate has remained in the 1% range for four consecutive months since March. With both sales and jeonse prices rising, demand for housing with relatively lower purchase burdens is likely to persist.
For the high-end housing market, burdening factors remain for the time being. In its tax reform proposal on the 3rd, the government decided to raise the basic deduction for comprehensive real estate tax from 1.2 billion won to 1.4 billion won for single-home residents, while lowering it to 900 million won for non-resident single-home owners. High-end properties exceeding a market value of 4 to 5 billion won will face increased tax burdens. Additionally, the long-term holding special deduction for capital gains tax will be phased in starting in 2028, with a focus on prioritizing actual residency.