As Housing Prices Soar, Real Estate Agencies Also Boom?... Lowest Closures in 18 Years

17,561 Nationwide Openings, 12,773 Closures
Housing Transactions Increase... Openings Rise, Suspensions and Closures Decrease

(Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] Due to the surge in housing prices and the resulting increase in sales transactions, the number of real estate agency office closures last year was the lowest in 18 years.

According to the Korea Association of Realtors on the 22nd, last year, there were 17,561 new real estate agency openings nationwide, 12,773 closures, and 1,087 temporary closures. The number of closures is the lowest since 2002, when there were 10,794 closures, marking the lowest figure in 18 years.

Closures of brokerage offices increased consecutively for three years from 2016 (14,470 cases) to 2018 (16,256 cases), but turned to a decreasing trend in 2019 (15,496 cases), and last year, they sharply dropped by 17.6% compared to the previous year.

Temporary closures also increased from 2016 (1,050 cases) to 2019 (1,253 cases), but last year, they decreased by 13.2% compared to the previous year, marking a decline for the first time in four years. On the other hand, openings increased by 3.8% last year compared to the previous year (16,916 cases).

The increase in openings and decrease in closures and temporary closures is due to the overheated real estate market last year, which led to an increase in housing transactions. The nationwide housing transaction volume last year was 1,279,305 cases, the highest ever since the government began compiling housing transaction statistics in 2006.

Another notable feature is that the opening rate is higher in other provinces than in the metropolitan area and major cities. In the metropolitan area and major cities, openings increased by 2.6% compared to the previous year, and temporary and permanent closures decreased by 15.1%, whereas in other provinces, openings increased by 8.5%, and temporary and permanent closures decreased by 24.1%. This is interpreted as the tightening of regulations on metropolitan housing shifting purchasing demand to provincial housing, land, and forest land.