Limo (73, male), who resides in the province, sold his 84㎡ apartment in the Lcents complex in Jamsil-dong, Songpa District, which he had owned for nearly 30 years, on April 30. The selling price was slightly less than 3.1 billion won. The decision to sell was made due to the apartment entering its 17th year and the need for cash for retirement funds. Limo said, "After excluding the deposit and taxes, I have a little over 1 billion won left, which I want to keep as an emergency fund," adding, "I want to invest in making my retirement more comfortable rather than investing more in real estate now."
Since the beginning of this year, a large number of homeowners who have owned dwellings in Seoul for over 20 years have begun to sell. In particular, the proportion of long-term ownership collective buildings being sold in the three districts of Gangnam (Gangnam, Seocho, Songpa) has significantly increased.
Within Seoul, it is interpreted that the demand for swapping to higher-end areas and the need to cash out real estate due to a temporary release of land transaction permission zones have intertwined with each other to raise housing prices.
According to the court registration information on the 9th, the number of sellers applying for ownership transfer registration for collective buildings (apartments, officetels, villas, and commercial buildings) that have been owned for over 20 years reached 2,697 from January to April this year. This represents a 75.5% increase compared to the same period last year. It is the highest since the active real estate market period of January to April 2020 (2,747 cases).
Among the autonomous districts in Seoul, transactions of long-term ownership collective buildings were active in the three districts of Gangnam. From the beginning of this year, 780 people sold collective buildings that they had owned for over 20 years in Gangnam's three districts, which is an increase of 123.5% compared to the same period last year (349 people). This is the highest level in the past five years. The number of sellers of long-term ownership collective buildings was ▲522 in 2020 (January to April) ▲451 in 2021 ▲229 in 2022 ▲144 in 2023.
The proportion of sales conducted in the three districts of Gangnam among all autonomous districts has also significantly increased to 28.9% this year. The proportion in Gangnam's three districts has maintained around 20% after recording 19.0% in 2020, 18.6% in 2021, 20.0% in 2022, 19.2% in 2023, and 22.7% in 2024.
The increase in sales of long-term ownership collective buildings centered around Gangnam is interpreted as a complex interplay of demand for switching to higher-end areas within Seoul and the need to cash out long-owned real estate. There is also an analysis suggesting that the rapid rise in housing prices in January and February due to the temporary release of land transaction permission zones in Jamsamdaecheong (Jamsil, Samsung, Daechi, Cheongdam) has partially affected this.
Park Won-gap, the senior real estate expert at KB Kookmin Bank, noted, "There is demand to switch to higher-end areas within Gangnam," adding, "Along with this, it seems that various factors, such as residential downsizing and tax-saving purposes through long-term holding deductions, are at play." He further explained that with various variables in the real estate market, it is not possible to pinpoint a single reason for the increase in sales by long-term owners.
Kim Hyo-sun, the senior real estate official at NH Nonghyup Bank, stated, "In the case of the three districts of Gangnam, the increase in housing prices is higher than in other regions, which has led to movements from sellers aiming to realize profits." He added, "Recently, since real estate in Gangnam carries symbolic meaning as much as practical demand, owners who initially aimed for practical purposes have even switched to other dwellings, looking to utilize their profits elsewhere."
Ham Young-jin, head of the real estate research lab at Woori Bank, explained that "collective buildings include not only apartments but also single-family homes, buildings, and multi-family houses, so it’s hard to limit the discussion to just apartments." He noted that in Gangnam, while expectations for reconstruction are high, the issues such as rising subscription prices and the recovery of excessive profits from reconstruction means there is a preference for moving to new properties that are five years or younger, thus explaining the increase in long-term ownership sales.
In particular, there are analyses suggesting that middle-aged and older individuals have also sold their long-term ownership collective buildings to target profits from tax benefits and residential downsizing.
Head of research Ham noted, "Owning a collective building for over 20 years likely means that the owner's age is in their 50s or older," and added, "In such cases, there may be instances where individuals adopt residential downsizing to benefit from capital gains tax exemptions through special deductions for long-term holdings while also providing some advance gifts to their children to prepare financial resources for retirement."