[Asia Economy Reporter Donghyun Choi] Amid increasing regulations on the real estate market, the transaction volume of commercial and office real estate has surged.
According to the Korea Real Estate Board on the 25th, the transaction volume of commercial and office real estate last month was 29,077 cases, up 32.66% from the previous month and 24.26% from the same period last year. At the beginning of this year, commercial real estate transactions sharply declined due to the economic downturn caused by the COVID-19 pandemic but have since rebounded. The transaction volume of commercial and office real estate recorded 28,192 cases in January, then decreased to 21,918 cases in May, down 22.3% compared to January.
During June, the region with the highest increase in transaction volume was Gyeonggi Province, which rose by 2,332 cases in one month, marking a 34.69% increase. Seoul (1,244 cases), Incheon (879 cases), Daejeon (698 cases), and Busan (369 cases) followed.
Supported by this rebound, the transaction volume for the first half of this year also exceeded last year's level. The transaction volume of commercial and office real estate in the first half of this year was 156,031 cases, an increase of 11,831 cases or about 8.2% compared to 144,200 cases in the same period last year.
Experts analyzed that the government's residential market regulations and the two announcements of the lowest interest rates this year influenced the rise in income-generating real estate transactions. Commercial and office real estate are subject to relatively fewer regulations such as taxes and loans compared to housing, and the Bank of Korea's additional cut of the base interest rate to 0.5% in May also contributed to liquidity flowing into commercial and office real estate. With the government announcing the 22nd real estate measure for the residential market on the 10th, it is expected that commercial and office real estate transaction volumes will increase further.
Oh Daeyeol, Research Team Leader at EconManLab, said, "As the residential real estate market shrinks and overseas investment becomes difficult due to COVID-19, domestic demand for income-generating real estate investment is increasing," adding, "Additional regulations on the residential market are expected to continue, so the transaction volume of income-generating real estate will steadily increase accordingly."
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