Gangnam, Seocho slip further as mid-priced districts surge — loan caps, tax reform split Seoul housing market

Apartment prices in Seoul's Gangnam-gu and Seocho-gu, which turned negative last week, fell at a steeper pace this week as distressed listings priced below market value emerged ahead of an incoming tax reform targeting high-end properties. By contrast, mid- to low-priced districts less exposed to lending restrictions posted stronger gains.

The Korea Real Estate Board's weekly apartment price survey for the third week of August 2026 (based on Monday's data) showed Seoul apartment prices rose 0.22% this week, slightly faster than the 0.21% gain recorded the previous week.

Among the capital's 25 autonomous districts, only Gangnam-gu and Seocho-gu — the two that turned negative last week — recorded declines. Seocho-gu apartments, which fell 0.04% last week, dropped 0.09% this week. Gangnam-gu, which slipped 0.02% last week, fell 0.05%.

Yongsan-gu did not turn negative but saw its momentum slow sharply, with apartment prices rising just 0.03% this week after a 0.12% gain last week. Songpa-gu, which together with Gangnam-gu and Seocho-gu forms the so-called Gangnam Three districts, also saw its weekly gain narrow to 0.10%.

Analysts attribute the weakness to the government's tax reform package announced Aug. 3. Under the new plan, even owner-occupiers with a single home face a sharp jump in property-holding taxes on properties valued in the upper range of 4 billion won ($2.85 million). That prospect of heavier tax burdens is believed to have prompted distressed selling concentrated in Gangnam-gu and Seocho-gu, where high-end properties are clustered.

"Because the tax burden will increase in earnest from 2028, a large volume of high-priced listings is likely to come to market through the end of next year," said Park Won-gap, chief real estate specialist at KB Kookmin Bank. "For now, the idea of Gangnam being invincible seems to be over."

Mid- to low-priced districts, meanwhile, accelerated. Dobong-gu led the gains, with its weekly rise jumping 0.14 percentage points to 0.31% from 0.17% the previous week. Gangbuk-gu edged up from 0.40% to 0.41% over the same period, and Nowon-gu expanded from 0.32% to 0.34%.

The gains reflect a surge in genuine buying demand — driven by a sharp drop in jeonse listings and rising jeonse prices — flowing into complexes priced at 1.5 billion won or below, where mortgage lending restrictions are less binding. Under current rules, apartments priced between 1.5 billion won and 2.5 billion won carry a mortgage cap of 400 million won, while those above 2.5 billion won are capped at 200 million won.

"In outer Seoul areas where jeonse prices have climbed steeply but sale prices have been slow to follow, prices are consistently rising, particularly in the northeastern districts," said Nam Hyeok-woo, a real estate researcher at Woori Bank. "We are seeing a steady inflow of genuine demand — single-person households without homes, newlyweds and similar buyers — concentrated in apartments around the 600 million won range, where the impact of reduced loan limits is relatively limited."

Park said demand from younger buyers should keep mid- to low-priced complexes on an upward trend for now, though he cautioned that one or two more interest rate increases could slow the pace of gains. "Given the limited supply, a full price reversal would be difficult even if rates rise, but prices could plateau," he added.