First-time homebuyers hit 4-year high as multiple home tax soon to expire

The number of first-time homebuyers in Seoul last month rose to the highest level in more than four years, ahead of the expiration of a temporary tax relief measure for owners of multiple homes.

A total of 7,341 buyers applied for ownership transfer registration in April after purchasing their first-ever residential property in Seoul, based on apartment and other multi-unit housing transactions, according to the Supreme Court’s registry information system on Wednesday.

The figure marked the highest monthly total since November 2021, when the property market was booming, and 7,886 first-time buyers were recorded. The April figure could rise further because ownership transfer registration can be completed within 60 days after the final payment is made.

The increase is widely seen as the result of homeowners with multiple properties rushing to sell homes in less desirable outer districts while keeping a single high-value property in preferred areas ahead of the end of the capital gains tax relief period. That trend appears to have created buying opportunities for end-users without homes.

By district, Nowon in northern Seoul recorded the largest number of first-time buyers with 623; followed by western Seoul’s Gangseo District with 582; northern Seoul’s Eunpyeong District with 451; central Seoul’s Seongbuk District with 445; southern Seoul’s Songpa District with 430 and Yeongdeungpo District in western Seoul with 426.

Except Songpa District, which has a large housing supply and bigger residential units, all of the districts were mid- to lower-tier areas where many properties are priced below 1.5 billion won ($1 million).

People in their 30s accounted for the largest share of first-time buyers at 4,231, or 57.6 percent of the total. They were followed by those in their 40s with 1,275 buyers, or 17.4 percent; people in their 20s with 11.1 percent and those in their 50s with 570 buyers, or 7.8 percent.

Under the government’s Oct. 15 housing measures introduced last year, mortgage loan limits were lowered to 200 million won for homes valued above 2.5 billion won and 400 million won for homes priced between 1.5 billion won and 2.5 billion won. However, buyers of homes valued below 1.5 billion won can still borrow up to the previous ceiling of 600 million won.

In regulated areas, the loan-to-value ratio for homebuyers without homes and one-home owners selling an existing property was also lowered to 40 percent. However, first-time homebuyers are still allowed to borrow up to 70 percent of a home’s value.

At the same time, declining supply in the jeonse (lump-sum deposit) rental market and rising deposits appear to have pushed more tenants to purchase relatively affordable homes in areas where prices had not previously surged, taking advantage of available borrowing capacity.

Housing prices in the mid- to lower-tier districts that attracted large numbers of first-time buyers have also risen sharply this year.

Seongbuk District recorded a cumulative rise of 5.37 percent in apartment sale prices through the second week of May, as of May 11, according to the Korea Real Estate Board. Gangseo District rose 5.10 percent, Yeongdeungpo District 4.60 percent and Nowon District 3.90 percent, all exceeding Seoul’s average increase of 3.10 percent.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY JUNG SI-NAE [[email protected]]