Due to the resumption of heavier capital gains tax on multiple home owners, the rise in Seoul apartment prices slowed compared with the previous week.

The Korea Real Estate Board said on the 5th that in the first week of February (as of the 5th), Seoul apartment prices rose 0.27% over the week. The pace slowed from the previous week (0.31%), halting the three week run of widening gains that had continued since the second week of January.

The Korea Real Estate Board analyzed, “Demand continued to center on new builds, large complexes, and areas near stations with favorable residential conditions, and contracts at higher prices were concluded, so the entire Seoul market rose.”

In particular, within Seoul, areas with many mid to low priced listings at or below 1.5 billion won showed pronounced increases. Among the city districts, Gwanak-gu recorded the largest gain at 0.57%, with its weekly increase expanding by 0.02 percentage points from the previous week. It was followed by Yeongdeungpo-gu (0.41%), Seongbuk-gu (0.41%), and Gangseo-gu (0.4%).

By contrast, the three Gangnam districts saw relatively smaller increases: Gangnam-gu (0.07%), Songpa-gu (0.18%), and Seocho-gu (0.21%). In Seocho-gu, the rate of increase slowed by 0.06 percentage points from the previous week, and in Songpa-gu it slowed by 0.13 percentage points.

Gyeonggi Province rose 0.13%, the same as the previous week. Among regulated areas in the province, Suji in Yongin (0.59%), Gwangmyeong (0.45%), and Bundang in Seongnam (0.4%) maintained high gains, while among non-regulated areas, Guri saw its increase widen sharply from 0.42% to 0.53%.

Experts said the decision to end the temporary suspension of the heavier capital gains tax on multiple home owners on May 9 increased listings mainly in the greater Gangnam area and slowed the rise in Seoul apartment prices. The government 1·29 supply plan to provide 60,000 homes in urban parts of the greater Seoul area also appears to have had some effect.

Nam Hyuk-woo of the Woori Bank Real Estate Research Institute said, “With concerns about heavier taxes and similar factors, the trend of listings coming onto the market mainly in the greater Gangnam area is expected to continue for the time being, so the overall slowdown in the rate of Seoul apartment price increases will persist,” adding, “However, the inflow of end user demand into mid to low priced areas in Seoul and non-regulated areas of Gyeonggi Province remains steady, and the upward momentum in prices is growing.”

Nationwide jeonse apartment prices rose an average of 0.08% from the previous week. In Seoul (0.13%), amid an ongoing shortage of jeonse listings since last year and ahead of the spring moving season, rental demand persisted around station areas·large complexes and preferred developments, lifting the overall market.