Land transaction permit filings across Seoul's 25 districts totaled 3,538 last month, down 35% from the previous low of 5,438 in July and setting a new 2026 low just one month after the last one. Loan restrictions and two consecutive base rate increases have eroded purchasing power, while the final shape of the government's tax overhaul remains undecided, pushing both buyers and sellers to the sidelines. Transactions have dropped sharply in districts crowded with expensive apartments now facing heavier tax burdens, steepening what market watchers call a transaction cliff.
Filings in Seoul had climbed to 10,165 in April, when distressed listings flooded the market ahead of the expiration of a grace period on heavier capital gains taxes for multiple-home owners, according to the Saeol civil affairs portal on the 2nd. Four months later, in August, the figure had fallen to about one-third of that level. Filings slipped into the 6,000 range in May and June as the slowdown persisted, then broke below 4,000 after the Aug. 3 tax overhaul was announced.
The declines were steepest in districts with the most expensive homes. Comparing April, the peak month, with last month, Seongdong District fell 78.8%, the largest drop. Seongdong had logged between roughly 100 and 220 filings a month, but recorded just 54 last month. Gangnam District fell 78.6%, Seocho 77.9% and Songpa 75.5%. Combined filings in the three Gangnam districts dropped 77.1%, to 368 in August from 1,607 in April. By contrast, Dobong District fell 39.9% and Geumcheon 38.5%, about half the decline seen in the Gangnam area. Transactions dried up first in areas with the highest share of expensive homes, where loan curbs bite hardest.
Listings, meanwhile, are piling up. Seoul apartment listings rose to 67,382 on the 1st of this month from 60,409 on the 3rd of last month, when the tax overhaul was announced, an increase of about 7,000 units or 11.5%, according to real estate data platform Asil. That marks a shift from June and July, when listings stalled in the low 60,000s even as transactions contracted.
Brokers on the ground point to loan restrictions and tax policy. The head of a brokerage in Gangnam District's Gaepo-dong said: "Loans aren't available, so who is going to have 3 billion to 4 billion won [about $2.2 million to $2.9 million] in cash? Sellers cut 200 million to 300 million won off market prices because nothing is moving, and even then there are no takers." An agent at a brokerage in Seongdong District's Oksu-dong said listings are coming out of the Gangnam area but owners who want to trade up cannot sell their own homes, blocking transactions in a chain.
Interest rates have added to the strain. The Bank of Korea's Monetary Policy Board raised the base rate by 0.25 percentage point in each of July and August, lifting it to 3.00% from 2.50%. Districts crowded with mid- and lower-priced homes below 1.5 billion won depend more heavily on borrowing and feel the rate increases more sharply. An agent at a brokerage in Nowon District's Wolgye-dong said buyers in their 30s who borrow nearly the full 600 million won limit are the main source of demand, but that transactions have quieted as rates keep rising and even reaching the 600 million won ceiling has become difficult. The agent added that the tax overhaul has little effect at these price levels, though some owners are watching for the final outcome.
Experts expect the lull to persist for some time. Hahm Young-jin, head of the real estate research lab at Woori Bank, said accumulated rate increases could limit buyers' purchasing power. "Home prices are high while rate increases and total household lending caps continue, so the transaction lull that had set in looks likely to last through the end of the year," he said.
The government the previous day dropped a plan to reduce the basic deduction on the comprehensive real estate holding tax for owners of a single home who do not live in it. The basic deduction will stay at the current 1.2 billion won, and a cap on the increase in tax burden that had been set to rise to 200% was returned to 150%. Market participants nonetheless doubt this will revive transactions, because the broader push to tax multiple-home owners and expensive homes more heavily remains intact, including a 1 billion won ceiling on capital gains deductions.
The head of a brokerage in Gangnam District's Gaepo-dong said: "With the revised tax package weaker than the original plan and National Assembly approval still pending, sellers who had planned quick sales are having second thoughts. Until the uncertainty clears, deals will be hard to close unless the buyer or seller is truly in a hurry."
