Apartment complexes in central Seoul are seen from Seoul Sky at Lotte World Tower in Songpa-gu on Wednesday. [Yonhap]
Apartment complexes in central Seoul are seen from Seoul Sky at Lotte World Tower in Songpa-gu on Wednesday. [Yonhap]

Apartment prices in Seoul's Gangnam-gu and Seocho-gu fell for the first time in roughly three months, as distressed listings priced hundreds of millions of won below market value emerged around complexes in Apgujeong, Cheongdam and Banpo in the wake of the government's proposed tax reform targeting high-value homes and non-resident single-home owners.

According to the Korea Real Estate Board's weekly apartment price survey for the second week of August 2026 (based on Monday's data), Seoul apartment prices rose 0.21 percent this week, narrowing from the 0.26 percent gain recorded the previous week.

Among the capital's 25 autonomous districts, Gangnam-gu and Seocho-gu were the only two to post declines. Gangnam-gu apartment prices, which had edged up 0.01 percent last week, fell 0.02 percent this week, while Seocho-gu prices, which had risen 0.02 percent the previous week, dropped 0.04 percent. It marked the first decline for Gangnam-gu since the first week of May, when prices fell 0.04 percent, and for Seocho-gu since the third week of April, when they slipped 0.03 percent.

The moves are widely attributed to fallout from the government's 2026 tax reform proposal, announced Aug. 3. The plan includes four key changes: raising the capital gains tax exemption threshold for owner-occupied single homes from a publicly assessed value of 1.2 billion won ($869,000) to 1.4 billion won; lowering the exemption threshold for non-resident single-home owners and multi-home owners (from 1.2 billion won to 900 million won, and from 900 million won to 400 million won plus 500 million won proportional to the share of owner-occupied housing); raising the fair market value ratio for property tax assessment from 60 percent to 70 percent; and gradually phasing out the tiered tax rate based on the number of homes owned. Together, the measures increase the holding-tax burden not only on multi-home owners but also on high-value single-home owners and non-resident single-home owners.

Because the comprehensive real estate tax and capital gains tax burdens rise sharply for homes valued above 4 billion to 5 billion won, distressed listings aimed at minimizing tax exposure have appeared across Gangnam and Seocho, pushing prices lower.

Mid- to low-priced districts, by contrast, saw their rate of price gains accelerate. Gwanak-gu rose from 0.30 percent last week to 0.34 percent this week; Gangseo-gu climbed from 0.20 percent to 0.23 percent over the same period; Gangbuk-gu advanced from 0.36 percent to 0.40 percent; and Eunpyeong-gu edged up from 0.27 percent to 0.28 percent.

Analysts say the trend reflects end-user demand concentrating in mid- to low-priced complexes priced at 1.5 billion won or less, where lending restrictions are less stringent, as rising jeonse prices and a sharp drop in available listings push renters toward buying. Nam Hyeok-woo, a real estate researcher at Woori Bank, said outer districts where jeonse prices have climbed steeply while sale prices have risen more slowly "are consistently seeing prices go up," adding that "steady end-user inflows — single-person households without homes, newlyweds and the like — are continuing to target apartments priced around 600 million won, which are less affected by tighter loan limits."

Districts along the Han River belt, meanwhile, saw their pace of gains slow. Gangdong-gu eased from 0.18 percent last week to 0.13 percent this week; Gwangjin-gu slipped from 0.11 percent to 0.10 percent; Dongjak-gu fell from 0.23 percent to 0.17 percent; Mapo-gu dropped from 0.39 percent to 0.20 percent; and Seongdong-gu declined from 0.36 percent to 0.30 percent.

Nam said prices overall are "moving in a narrow range of modest gains and losses, tracing a box-pattern trend," and that "as distressed listings continue to emerge, particularly in Han River belt areas within the two Gangnam districts, the possibility of localized price corrections should be kept in mind." He added that owners in the Han River belt are heavily influenced by conditions in the core Gangnam market, since many are looking to move into that area, and that their calculus has grown more complicated — they must weigh whether they can absorb holding costs between selling their current home and buying in Gangnam. "On the whole," he said, "the current quiet atmosphere is expected to continue for now."


hwshin@heraldcorp.com