New applications for land transaction permits on Seoul apartments fell to 3,012 in August, down 34.8% from 4,618 in July, the Seoul Metropolitan Government said on 14 September, according to Seoul Economic Daily. It was the smallest monthly total since every apartment in Seoul was placed inside a land transaction permit zone in October last year, and more than 1,000 below the 4,019 filings recorded in November last year.
Filings have now declined for four consecutive months after peaking at 8,896 in April, falling to 6,011 in May, 5,277 in June and 4,618 in July — a 66.1% drop from the April peak. Average daily applications fell 28.3%, from 209.9 in July to 150.6 in August.
The city government attributed the decline to several overlapping factors: the end of a grace period on heavier capital gains tax for multiple-home owners, funding pressure from base rate increases in July and August, and lending restrictions. It said buyers also became more cautious as the government’s 3 August tax reform package awaited legislative steps, including parliamentary review.
A waiver of owner-occupancy requirements for homes with sitting tenants, which the government has been expanding to encourage listings, has yet to show a clear effect. Waiver applications totalled 135 in August, 4.5% of all permit filings and down 34.8% from 207 in July.
Prices diverged by area even as volumes fell. Prices in permit applications across Seoul rose 0.17% month on month, sharply slower than July’s 1.41% gain. Application prices rose 0.61% in the ten northern districts and 0.52% in seven Han River belt districts (Seongdong, Mapo, Gwangjin, Dongjak, Yangcheon, Yeongdeungpo and Gangdong), but fell 0.34% in the three Gangnam districts and Yongsan and 0.99% in four southwestern districts (Gangseo, Gwanak, Guro and Geumcheon). Filings in the northern districts fell a smaller 31.4% to 1,471, lifting their share of all Seoul filings to 48.8% from 46.4%.
The city government said the northern districts’ larger share reflects sustained demand from owner-occupiers in lower-priced areas rather than rising transactions, and described the market as showing regional differentiation rather than a uniform correction.
References
Seoul Economic Daily – Seoul Land Deal Permit Filings Fall for Fourth Straight Month
