Property sales in Seoul are slowing, yet the share of sellers who are older owners is climbing. Buyers in their 30s, the market's main driver, have pulled back. Lending curbs, heavier taxes and rising interest rates are together making buyers more cautious.
Filings to transfer ownership of multi-unit buildings in Seoul, which reflect completed sales, totaled 15,563 in September, down 10.62% from 17,411 in August, according to data released on the 5th by the Supreme Court's registry information service.
Buying by people in their 30s, which had led the market, also declined. Data on buyers filing for ownership transfers showed 5,880 buyers in their 30s for multi-unit buildings in Seoul in September, down 15.82% from 6,985 a month earlier. Buyers in their 40s fell 12.98% to 4,959 from 5,699. The combined share of buyers in their 30s and 40s slipped to 60.86% in September from 64.23% in August, a drop of 3.37 percentage points.
Even as transactions shrank, the share of older sellers rose. Data on sellers filing for ownership transfers showed that sellers aged 60 and over accounted for 42.18% of multi-unit building sales in Seoul in September, up 1.63 percentage points from 40.55% a month earlier.
Selling by older owners was more pronounced in the Gangnam area, where the tax overhaul has had the greatest impact. In the three Gangnam-area districts of Gangnam, Seocho and Songpa, sellers aged 60 and over made up 50.34% of sales in September, up 3.17 percentage points from 47.17% in August and the highest level this year. The share of sellers aged 70 and over also rose 4.53 percentage points to 27.96% from 23.43%, likewise a high for the year.
In Gangnam District, the total number of sellers fell 9.79% to 912 in September from 1,011 in August, but sellers aged 70 and over rose 22.47% to 278 from 227 over the same period. Their share climbed 8.03 percentage points to 30.48% from 22.45%, the only one of Seoul's 25 districts to exceed 30%.
In Yongsan District, home to many high-priced properties, the share of older sellers also jumped. Sellers aged 60 and over accounted for 54.66% of sales in September, up 12.61 percentage points from 42.05% in August and the highest level this year. The share of sellers aged 70 and over rose 4.06 percentage points to 23.47% from 19.41%.
The slowdown is spreading beyond Seoul to the wider metropolitan area and the rest of the country. Nationwide filings to transfer ownership of multi-unit buildings totaled 73,561 in September, the lowest level this year and down 17.69% from 89,363 in the same month a year earlier. Filings in the Seoul metropolitan area also fell to 42,820 in September, the lowest level this year.
Nam Hyuk-woo of the Woori Bank Real Estate Research Institute said the key factors behind the sharp increase in capital gains taxes on high-priced homes under the tax overhaul continue to pressure owners to sell. "With investor sentiment also dampened by rising interest rates, there is a strong chance that slowing transactions and soft prices will continue for some time," Nam said.
