▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an AI-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six tailored news items by reader type.
[Key Issue Briefing]
■ Tax-Driven Listings Surge, but Sales Freeze: As of the 12th, listings of Seoul apartments reached 64,082, up about 4,000 (6.0%) from the 3rd, when the tax reform plan was announced. In Gangnam district alone, an additional 760 listings (8.0%) pushed the total past 10,000. However, three layers of regulation are interlocking to prevent actual transactions: restrictions on transferring union membership in redevelopment complexes in speculation-prone zones, a 200 million won loan cap on apartments worth 25 billion won or more, and owner-occupancy requirements under the land transaction permit system. Strategies of waiting for distressed sales and delaying final payments are spreading.
■ Widening Supply-Demand Imbalance in the Rental Market: With reduced tax benefits for non-resident-owned homes, landlords are rapidly converting to owner-occupancy. By the end of this year, at least 10,347 units subject to the "2+2 year" lease renewal right are expected to reach expiry across Seoul. With 2,551 concentrated in the three Gangnam districts alone, supply is deteriorating sharply — at Helio City, only one jeonse listing remains for the most common apartment size. Concerns are also growing over a ripple effect spreading Gangnam jeonse demand to areas such as Seongdong, Mapo, Yangcheon and Dongjak.
■ Redevelopment Relocation Conflict Escalates: The Eunma Apartments redevelopment union, aiming to begin relocation in the first half of next year, has preemptively notified all tenants of four types of lawsuits, including eviction suits, injunctions and damages claims. Unlike district redevelopment, apartment redevelopment projects have no statutory provisions on relocation costs or moving expenses, leaving tenants effectively without a protective safety net. Given that jeonse prices in Daechi-dong are 500 million to 600 million won higher than in surrounding areas, a concentration of relocation demand could spark a broader moving crisis across the Gangnam jeonse market.
[News of Interest to Real Estate Investors]
Key summary: The government's "Aug. 3 tax reform plan" is expected to raise holding taxes and capital gains taxes on owners of high-priced homes, multiple homes and non-resident single homes. As a result, listings aimed at reducing tax burdens have surged, centered on the Gangnam area. Listings in Gangnam district rose by 760 (8.0%) from the 3rd, topping 10,000. But transactions are proving difficult to close, as restrictions on transferring union membership, a 200 million won cap on mortgages for homes worth 25 billion won or more, and owner-occupancy requirements under the land transaction permit system overlap. An exit has opened in the form of a suspension of the heavier capital gains tax on multiple-home owners through 2028. However, from 2028 a new cap on the long-term holding special deduction means tax burdens will spike sharply for those who miss the deadline. Confusion is peaking among landlords whose holding periods, sale timing and financing plans have all become tangled.
Key summary: Since the tax reform plan was announced, reduced tax benefits for non-resident-owned homes have sharply increased landlords' conversion to owner-occupancy, accelerating the supply-demand imbalance in Seoul's rental market. At Helio City, nearly half of the units expiring in September and October have shifted to owner-occupancy, leaving only one jeonse listing for the most common apartment size. Units subject to the "2+2 year" renewal right reaching expiry by the end of this year total 10,347 across Seoul (2,551 in the three Gangnam districts). Rental listings in Seoul have fallen a marked 14.1% from early this year to 38,157. In 2027, an additional 49,078 units on which the renewal right has been used will reach expiry, meaning instability in the rental market is expected to persist over the medium and long term.
3. "Vacate by Next Year or Face Lawsuits": 3,000 Eunma Tenants Under Pressure [Real Estate Lounge]
Key summary: The Eunma Apartments redevelopment union, seeking to begin relocation of 4,424 households, has preemptively notified all tenants of four types of lawsuits: eviction suits, injunctions barring transfer of occupancy, damages claims and claims for return of unjust enrichment. Because of the nature of redevelopment projects, the Act on the Improvement of Urban Areas and Residential Environments contains no provisions on relocation costs or moving expenses, so tenants are effectively entitled to no monetary compensation. Given that jeonse prices in Daechi-dong are 500 million to 600 million won higher than in surrounding areas, a concentration of relocation demand could send shockwaves across the entire Gangnam jeonse market. Tenants who are non-resident single-home owners face a double burden, struggling even to secure a new place before the lease on their own property expires.
[News for Reference by Real Estate Investors]
4. Savings Bank and Nonghyup Home Loans Surge 47% in Five Years: "Easy Business Taking Deposits"
Key summary: The balance of home-related loans at non-bank deposit-taking institutions such as savings banks, credit unions and community credit cooperatives reached 144.5554 trillion won at the end of March this year, up 47.4% over five years from 98.0994 trillion won at the end of March 2021. A ripple effect from tighter banking-sector regulation has added to the shift of loan demand to mutual finance. The share of home-related loans among non-bank household loans jumped from 29.9% to 44.5% over the same period. The delinquency rate on household loans at non-bank financial institutions stood at 2.26% at the end of March this year, up from 2.08% at the end of last year. Investors considering non-bank options once their bank loan limits are exhausted should weigh both interest rate terms and soundness risks.
Key summary: With Dobong District Office approving the union establishment preparatory committee for Changdong Jugong Complex 18 — the first among redevelopment complexes in the Changdong-Sanggye land development district — redevelopment projects in the Changdong area are expected to gain momentum. Completed in 1988, Changdong Jugong Complex 18 has a floor area ratio of 138% and 910 units, giving it strong business viability, and its location is favorable, adjacent to Changdong Station on Lines 1 and 4. Nearby Changdong Jugong Complex 4 (1,710 units) and Complex 19 (1,764 units) are also collecting consent forms, aiming to form preparatory committees in the second half of this year. The G3 Seoul Plan Planning Committee has set a direction to develop Changdong-Sanggye into a wide-area hub for the northern Seoul metropolitan area, making medium- and long-term development prospects increasingly tangible.
Key summary: MODO, the Japanese residential platform of IGIS Asset Management, has completed the acquisition of a residential asset in Roppongi, Tokyo (completed in 2013, 14 floors above ground, 37 units). It attracted about 40 billion won in equity investment from Taiwanese investment firm APLUS. With total investment of 80 billion won, residential rents in Roppongi are about 48% higher than the average for central Tokyo. A large-scale mixed-use redevelopment dubbed "the second Roppongi Hills" is being pursued nearby, with strong expectations for medium- and long-term asset value gains. The structure sees Taiwanese capital flowing into Japanese residential assets through a domestic manager's platform. It draws attention as a trend in overseas indirect investment, reflecting growing interest among global institutional investors in residential assets in Asian cities.
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