Seoul = Yonhap News) Reporter Seo Mi-sook = Among the apartments in Seoul sold after the announcement of the government's August 3 tax reform plan, 8 out of 10 were transactions of less than 1.5 billion won.
In particular, the proportion of loans under KRW 600 million available for low-interest policy loans, such as for purchasing a home for the first time, has increased significantly.
The tax reform plan is aimed at ultra-high-priced apartments in the Gangnam area, but transactions are low due to the burden of tax increases, while relatively many buyers are flocking to low-priced apartments only due to monthly rent shortages and loan regulations.
As a result of analyzing Seoul apartment sales transaction data reported to the Ministry of Land, Infrastructure and Transport's actual transaction price system on the 5th, the proportion of transactions under 1.5 billion won among Seoul apartments contracted since August, when the August 3 tax reform plan was announced, accounted for about 79% (excluding contract cancellation and public institution purchases).
The proportion of transactions under 1.5 billion won averaged 73.3% in the 10 months before the October 15 measures last year (December 2024 to September 2025), but increased to 76.8% in the 10 months until July this year (October 2025 to July this year).
As the mortgage loan limit was reduced to a maximum of 600 million won for those with a market value of 1.5 billion won or less, 400 million won for those with a market value between 1.5 and 2.5 billion won, and 200 million won for those exceeding 2.5 billion won, buying pressure was concentrated on those below 1.5 billion won, where relatively large loans are possible.
After the August 3 tax reform plan, which focused on increasing taxes on ultra-expensive homes, the number of properties for sale below market price increased in the Gangnam area and prices fell, but the buying trend of mid- to low-priced apartments continues.
In addition to the availability of large loans compared to the sale price, and the shortage of low-priced jeonse and monthly rent properties in Gangbuk and other areas, the demand for rental has shifted to demand for sales.
In particular, the proportion of transactions under KRW 600 million eligible for government policy loans, such as first-time home purchase funds, accounted for 25% of the total, or 4 out of 10 cases.
Compared to 17.0% before the 10/15 measures and 20.5% until July of this year after the 10/15 measures, the increase after the announcement of the tax reform plan was particularly large.
A real estate agent in Sanggye-dong, Nowon-gu said, “As new rental properties disappear, many young people, including newlyweds, have no choice but to take out a stepping stone loan for the first time in their lives and turn to buying,” adding, “You can borrow up to 70% of the house price, up to 320 million won, and the interest rate is as low as 3% per year, so it is much more advantageous than a regular mortgage.”
However, even in transactions under 1.5 billion won, there were differences depending on the amount.
Transactions exceeding KRW 600 million to KRW 900 million or less showed an increase from 23.2% before the 10/15 measures to 25.9% after the 10/15 measures, and 27.6% after August of this year, while transactions exceeding KRW 900 million to KRW 1.5 billion increased from 33.1% to 30.4% around the October 15 measures, or after August of this year. It continues to decline to 26.3%.
As a result, only low-priced apartment transactions under 900 million won are increasing, while the proportion of other transactions is decreasing.
A local real estate agent explains that even if the market price is KRW 900 million to KRW 1.5 billion and a loan of KRW 360 million to KRW 600 million with a loan-to-value ratio (LTV) of 40% is received, it is difficult to purchase a home because it requires more than KRW 540 million to KRW 900 million of own funds, which is more than the loan amount.
The proportion of apartment transactions exceeding KRW 1.5 billion and under KRW 2.5 billion, which allows for a loan of up to KRW 400 million, decreased from 18.4% to 16.0% around the October 15 measures last year, and has further decreased to 15.3% since August.
The proportion of high-priced apartment transactions exceeding 2.5 billion won, which is also the target of this tax reform plan, decreased from 8.3% to 7.2% and 5.8%, respectively.
The number of properties for sale that are 1 to 2 billion won cheaper than the previous high is increasing, especially in high-priced complexes in the Gangnam area, but buyers are still taking a wait-and-see approach due to the uncertainty of the tax reform plan and the burden of property taxes.
The decrease in trading volume is also affecting prices.
According to the Korea Real Estate Board, Gangnam and Seocho-gu continued to decline for eight consecutive weeks after the announcement of the tax reform plan, while non-Gangnam regions, including Gangbuk, are still on the rise.
Experts believe that the ‘decoupling’ phenomenon in the Gangnam-Gangbuk and high-price-low-mid price markets will continue for the time being.
This is because the monthly rent crisis for mid- to low-priced apartments continues and the Gangnam area is likely to continue a wait-and-see approach ahead of the National Assembly's tax reform plan.
However, in Nowon, Dobong, Gangbuk, Seongbuk, and Jungnang-gu, which have been leading the rise in prices recently, the increase in sales prices appears to be slowing down due to price increase fatigue, and in the Gangnam area, ultra-high-priced apartments are being sold little by little from complexes with large price drops, so some predict that the gap will gradually narrow.
A real estate agent in Banpo-dong, Seocho-gu said, “We will have to wait and see how the tax reform bill is processed by the National Assembly, but if property tax and long-term holding special deductions are passed according to the government’s original plan, single-home owners of ultra-expensive apartments will have to sell their homes by next year to save on taxes, so transactions in the Gangnam area are expected to gradually increase after the end of the year.”
