Record High Commercial Real Estate Sales in January Despite COVID-19

[Asia Economy Reporter Onyu Lim] Despite the spread of COVID-19, the demand for purchasing commercial real estate is increasing due to strengthened housing regulations and ultra-low interest rates. Commercial real estate refers to neighborhood living facilities and retail facilities closely used in daily life, such as hospitals, supermarkets, restaurants, and bakeries.

According to the analysis of the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system by the Commercial Information Research Institute on the 3rd, commercial real estate sales in January this year reached 5,852 cases, marking the highest number of sales in January since related statistics began in 2006. Compared to the same period last year (4,382 cases), this is a sharp increase of 33.5%.

In January, the regions with the highest commercial real estate sales were Gyeonggi (1,758 cases), Seoul (1,203 cases), Busan (551 cases), Incheon (294 cases), Gyeongnam (283 cases), and Daegu (248 cases), in that order. The metropolitan area accounted for 55.6% of total sales.

Researcher Hyuntaek Cho of the Commercial Information Research Institute explained, "Although there was a COVID-19 crisis, the popularity of commercial real estate, which is relatively free from regulations and has high yields, remains steady due to increased regulations on residential real estate and the maintenance of a low-interest rate trend. Additionally, recently, commercial real estate listings priced lower than market value have occasionally appeared, leading to an increase in transaction volume."

Although the commercial market showed signs of stagnation last year due to the spread of COVID-19, the number of commercial real estate transactions (63,354 cases) actually increased by 5.3% compared to the previous year (60,148 cases).