Gangnam apartment prices fall before tax hike

About a month after the government officially announced plans to end the temporary suspension of higher capital gains taxes on owners of multiple homes on May 9, apartment prices in Seoul’s three wealthy Gangnam districts—Gangnam, Seocho, and Songpa—have all begun to decline.

The drop marks the first in 100 weeks for Gangnam and Seocho since the second week of March 2024, and the first decline in 105 weeks for Songpa since the first week of February that year. Analysts say the downturn reflects a surge of listings from multiple-home owners aiming to sell before the heavier tax rates take effect, particularly in high-priced neighborhoods. The trend follows President Lee Jae-myung’s public calls on social media urging owners of multiple properties to put them on the market.

According to weekly apartment price data released Feb. 26 by the Korea Real Estate Board, prices in the Gangnam three districts and Yongsan fell in the fourth week of the month, as of Feb. 23. Gangnam apartments slipped 0.06 percent, reversing a 0.01 percent gain the previous week, marking the first decline since March 2024 and the largest drop among Seoul’s 25 districts. Songpa fell 0.03 percent, Seocho 0.02 percent, Yongsan 0.01 percent, and Gwacheon in Gyeonggi Province 0.10 percent.

In the remaining 21 districts of Seoul, excluding the Gangnam three districts and Yongsan, apartment prices continued to rise. Overall, Seoul apartment prices increased 0.11 percent, down from a 0.15 percent gain the previous week. Growth has slowed for four consecutive weeks after peaking at 0.31 percent in the fourth week of January.

The downturn in Seoul’s Gangnam area appears to be driven by a surge in urgent listings from multiple-home owners eager to sell before the heavier capital gains tax takes effect. Asking prices have dropped, and some transactions have closed at several hundred million won below previous record highs.

Apartment listings in Seoul rose 25.9 percent, increasing from 56,216 on Jan. 22, the day before President Lee Jae-myung confirmed on X, formerly Twitter, that higher capital gains taxes for multiple homeowners would be reinstated, to 70,784 as of Feb. 26, according to data from the real estate platform Asil.

Experts say the downward trend in Gangnam and Yongsan apartment prices is likely to continue until the higher tax rates take effect on May 10. With urgent listings piling up, potential buyers are holding off in anticipation of further declines, creating a standoff between sellers and buyers.

Lee Sang-young, a professor of real estate at Myongji University, said that because Gangnam has a high concentration of expensive homes, the tax burden is substantial, prompting owners to sell quickly and triggering sharper price adjustments early on. He added that whether the decline continues will depend on additional policy measures, including potential revisions to real estate taxation, as well as the pace of new housing supply in central Seoul.


윤명진 기자 mjlight@donga.com