Gangnam home prices ease as Korea plans holding-tax reform to curb speculation

Seoul’s housing market is easing in the Gangnam area as the government signals a shift to tax changes aimed at curbing real estate speculation. Officials say they are preparing a reform of holding taxes that would cover ultra-high-price homes and non-resident one-home owners, a move tied to the broader effort to address the so-called “one well-chosen home” phenomenon.

In Songpa District, an apartment recently traded for about 758 million won below its previous peak, while in Gangdong District a different unit sold roughly 230 million won below its peak. Industry observers note that some sellers are willing to adjust their asking prices, with comment that properties priced above 1.5 billion won may need to lower expectations to move.

The slide in prices follows sustained emphasis by President Lee Jae-myung on rooting out speculation by multi-homeowners. Since then, the Gangnam three districts and Yongsan District have posted three straight weeks of declines, and Gangdong has shifted to a decline for the first time in 56 weeks.

Market activity has also been affected by the upcoming expiry on May 9 of a preferential capital gains tax treatment for multi-homeowners, which has prompted more listings as owners seek to time sales ahead of the change.

Kim Yoon-deok, the minister of the Ministry of Land, Infrastructure and Transport, said on a radio program that the government is preparing a comprehensive reform of holding taxes, including ultra-high-price homes and non-resident one-home owners, to address inequities in tax burdens.

Kim also argued that the tax burden on high-priced homes has not kept pace with those paid by typical workers, signaling a broader reevaluation of the tax system as part of the housing policy shift.

This is the first time the government has publicly linked holding-tax reform to real estate speculation, turning a page on how “ultra-high-priced” housing will be defined. Currently, the high-priced housing threshold is 1.2 billion won, a level that is about 30 million won below last year’s average Seoul apartment price.

Analysts say the threshold could be redefined using Gangnam-area price levels, with higher rates applied to more expensive properties. If adopted, the reform would mark a notable policy shift in Korea’s approach to housing taxation and market management.

For U.S. readers, the developments matter because Korea’s housing policy affects domestic demand, construction activity, and the operating environment for multinational firms with offices and supply chains in Seoul. Policy signals on taxation, investment risk, and urban housing markets can influence capital flows, wage growth, and the cost of living in one of Asia’s key tech and manufacturing hubs. The path Korea chooses here could also inform how foreign investors assess Korea’s regulatory risk and macro stability in the months ahead.