[Editorial] Cooling of Real Estate Transactions: Aftereffects of Taxes and Regulations?

August apartment transactions in Seoul were found to have been cut in half compared to the previous month. While this follows the resumption of heavy taxation on capital gains for multi-home owners since May 10, uncertainty over changes in real estate tax policy also contributed to buyers' hesitation. On the other hand, income increases such as performance bonuses from some semiconductor companies like Samsung Electronics have stimulated housing purchase demand, gradually narrowing the government's room for policy choices.

August apartment sales transactions in Seoul totaled 2,887 cases, a 50.5% decrease from July's 5,829 cases. Compared to April through June, when figures hovered between 5,200 and nearly 9,000, this represents only about one-third of that volume. Although a surge in listings occurred before and after the resumption of heavy transfer taxes, difficulties in finding original buyers due to loan restrictions played a major role. Furthermore, after tax hikes, sellers raised their desired selling prices, while buyers, unable to predict future tax reforms or home price trends, sharply reduced transaction activity. As rental listings disappeared and sales declined further, complaints grew that businesses such as real estate agencies, moving companies, and painting and interior design firms are losing work. A drop in demand for durable goods like appliances and furniture could lead to a broader contraction in domestic consumption.

The issue is that income growth among salaried workers, particularly those at certain semiconductor companies like Samsung Electronics and SK Hynix, driven by performance bonuses and expanded internal loans, has led to continued increases in housing purchase demand in specific areas, resulting in actual transactions. Indeed, home price increases have expanded around the "semiconductor belt," including Hwaseong and Dongtan in Gyeonggi Province. This has become a localized market instability factor severe enough to warrant designation as a land transaction permit zone. On the 10th, the Bank of Korea stated in its financial stability report that "given future housing supply-demand conditions and household income circumstances, uncertainty regarding the housing market and household loans remains high in the short term."

In this situation, raising the base rate or tightening household loans could lead not only to a shortage of listings but also to a prolonged transaction freeze. Difficulty in securing homes would affect marriage and childbirth decisions, and in Seoul's outskirts and regional areas, the housing ladder would be broken, leaving people unable to move forward or backward. For genuine homebuyers, it is essential to lower loan thresholds and continuously deliver results from housing supply policies. Rather than hesitating while watching public opinion, real estate tax reform plans should aim to enhance predictability.