A sharp drop in apartment gifts

Amid a clear downward trend in housing prices across the country, the ratio of apartment gifts in Seoul has fallen to its lowest level in two years and eight months. Generally, gifts are actively made when apartment prices rise, but the burden of interest on loans has increased due to the increase in interest rates, and the number of people postponing gifts seems to have increased as housing prices continue to decline.

부동산 실거래가 조회 According to the statistics released by the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Agency on the 5th, the number of apartment gifts in Seoul in July was 337, accounting for 7.2 percent of the total transaction volume (4651). This is 4% lower than in June (11.2%), the lowest level since November 2019 (6.1%)

The number of apartment gift transactions in Seoul has soared under the previous administration, which tightened regulations on multi-homeowners. In fact, the average number of monthly gifts from 2019 to last year was maintained at more than 1,000 (1042 in 2019 → 1972 in 2020 → 1,036 in 2021. In July 2020, the number of cases reached an all-time high of 3,362.

Seoul’s apartment donation ratio started at 10.2 percent in January this year and rose to 23.1 percent in April. Since May 10, the ratio of Seoul apartments has been declining for three consecutive months since May (17.2 percent) despite the fact that multiple homeowners can pay transfer taxes at the general tax rate. Since the end of last year, the loan regulations have been strengthened, and the increase in housing prices has slowed down due to a series of interest rate hikes, and the number of gifts has started to decrease significantly this year.

The proportion of apartment gifts in Gyeonggi Province and Incheon in the Seoul metropolitan area was 10.9 percent and 11.8 percent respectively in July, which is different from that in June (4.3 percent and 3.0 percent). In the same month, the number of apartment gifts nationwide was 3,388, which was 7.9 percent higher than the total transaction volume (42,595), which was 5.2 percent higher than the previous month.

Expectations for easing regulations on multi-homeowners, including the revision of the comprehensive real estate tax law by the Yoon Seok-yeol government, are also contributing to the decline in the steam. A year or two ago, a large number of gifts were given to children and acquaintances of multi-homeowners in Gangnam, Seoul, due to the tax burden such as the comprehensive real estate tax, but the new government’s tax reduction has given them time to decide whether to own or donate.

In July, Jung-gu District had the highest donation ratio of 36.2 percent among Seoul’s 25 districts, followed by Jongno-gu District with 27.8 percent. In comparison, Yongsan-gu fell to 10.7 percent from the previous month (15.7 percent), while Seongdong-gu plunged from 20.4 percent in June to 2.3 percent in July.

In the case of Gangnam area, Seocho-gu, where apartment prices were on the rise until July, rose from 13.8 percent in June to 17.4 percent in July. 아파트 실거래가 조회 During the same period, Gangnam-gu and Songpa-gu fell sharply from 34.7 percent to 13.8 percent and 15.4 percent to 4.1 percent in July, respectively.

A real estate industry official said, “As housing prices began to fall due to the worsening trading cliff in the Seoul apartment market, the demand for gifts has increased. In the case of Seoul, where housing prices are high, gift taxes have decreased.

Experts predict that the number of apartment gifts in Seoul will increase again as this year is more advantageous than next year. In the case of multi-homeowners’ contribution, it is advantageous to give gifts before May next year, when the heavy transfer tax is imposed, so the number of multi-homeowners who want to reduce the number of houses before June 1 next year may increase.

Recently, more and more families are choosing to buy and sell at low prices instead of giving gifts. This is because the tax burden of buying and selling is less depending on the situation than giving gifts. According to the inheritance tax and gift tax law, if the difference between the market price and the selling price is 30 percent or less than 300 million won, it will not be a problem even if the price is lowered.

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