The number of land transaction permit applications for apartments in Seoul has decreased for three consecutive months, dropping 47.5% from the peak in April. Demand remains strong in the northern and southwestern areas compared to Gangnam and Yongsan.
On August 14, the Seoul city government reported that the number of new land transaction permit applications for apartments in July totaled 4,681.
According to the city, the July applications represent a 47.5% decrease from the year's peak of 8,911 applications in April. This figure also marks an 11.7% decline from June's 5,304 applications. The trend has continued downward from April's peak of 8,911 to 6,021 in May, 5,304 in June, and now 4,681 in July.
The average daily applications in July were 212.8, down 15.8% from June's 252.6, marking the lowest level this year. As of the end of July, the cumulative number of applications since the implementation of the land transaction permit system across Seoul reached 53,114, with 51,698 (97.3%) processed.
The city analyzed that the decline in applications is a result of a combination of factors, including a surge in so-called 'last-minute transactions' in April and May before the end of the tax exemption for multiple homeowners, leading to a lock-up of listings and a wait-and-see approach from buyers and sellers ahead of the announcement of the August 3 tax reform plan.
Regionally, all areas saw a decrease in permit applications. Notably, Gangnam and Yongsan experienced the largest drop, with applications falling from 691 in June to 542 in July, a decrease of 21.6%. Their share of total applications also fell from 13.0% to 11.6%.
The seven districts along the Han River saw applications decrease from 1,168 to 1,033, a drop of 11.6%. The ten districts in North Gangbuk saw a decline from 2,450 to 2,185, a decrease of 10.8%, while the four districts in the southwestern area dropped from 995 to 921, a 7.4% decline.
However, the share of applications from North Gangbuk increased from 46.2% to 46.7%. The southwestern area also rose from 18.8% to 19.7%. The Han River belt saw a slight increase from 22.0% to 22.1%, while Gangnam and Yongsan's share decreased from 13.0% to 11.6%.
The city noted that the wait-and-see attitude was particularly pronounced in the high-priced areas of Gangnam and Yongsan, ahead of the announcement of lending regulations and tax reforms. In contrast, demand in North and Southwestern areas remained strong, particularly for apartments priced around 600 million won, which are eligible for policy loans, attracting first-time buyers and newlyweds. The shortage of rental properties also contributed to some rental demand shifting to purchases.
Applications for exemptions from the mandatory residence requirement for properties with tenants also decreased. In July, there were 211 applications, accounting for 4.5% of total permit applications, down 23.6% from 276 in June, with its share of total applications falling from 5.2% to 4.5%.
Regionally, North Gangbuk had the highest number of applications at 96, followed by the Han River belt with 53, and both Gangnam and Yongsan and the southwestern area with 31 each.
The city believes that the government's ongoing policy to expand the temporary exemption from the mandatory residence requirement in land transaction permit zones will have a limited impact on the real estate market.
Alongside the decline in applications, the rate of increase in application prices has also slowed. In July, the average application price for land transaction permits in Seoul rose by 1.41% compared to the previous month, a significant decrease from June's 2.67% increase.
Regionally, Gangnam and Yongsan saw a modest increase of 0.38%, while the Han River belt rose by 0.63%. In contrast, North Gangbuk experienced a 1.78% increase, and the southwestern area rose by 2.29%, continuing a relatively high growth trend.
The city analyzed that the temporary trading impact from the end of the capital gains tax exemption for multiple homeowners has mostly dissipated, leading to stable general trading activity. As demand continues to focus on real needs amid lending regulations, the overall price increase in Seoul has slowed. Notably, in North and Southwestern areas, the demand for mid-priced apartments has resulted in higher growth rates compared to Gangnam.
* This article has been translated by AI.
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