Seoul apartment market shifts toward low-priced homes

Following the August 3 tax reform announcement, the Seoul apartment market is experiencing a significant shift toward low-to-mid-priced properties. Data from the Ministry of Land, Infrastructure and Transport shows that approximately 79% of apartment transactions in Seoul since August were for properties valued at 1.5 billion won or less.

There has been a notable surge in transactions for apartments priced below 600 million won, which now account for 25% of all deals. This increase is attributed to the availability of low-interest government policy loans, such as those for first-time homebuyers. Conversely, transactions for high-end properties exceeding 2.5 billion won have declined, falling from 8.3% to 5.8% following the tax reforms.

Market analysts observe a decoupling effect between different regions and price points. While high-end areas like Gangnam and Seocho have seen eight consecutive weeks of price declines due to tax uncertainties and holding cost burdens, non-Gangnam areas, including Gangbuk, continue to see rising prices. This trend is further driven by a shortage of low-cost rental properties, pushing some renters toward purchasing lower-priced homes.