Turnover Rate of Multi-Unit Building Transactions Hits Lowest in 9.5 Years... Buying Demand Continues to Decline

Turnover Rate of Multi-Unit Building Sales at 0.41%
Lowest Since January 2013's 0.32%
Lowest Rates in Daejeon, Seoul, and Sejong
Transaction Cliff Deepens as Buying Demand Declines

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Seoyul] The turnover rate of sales transactions for collective buildings, including apartments, has dropped to its lowest level in nine and a half years. As buyers remain cautious, the trend of a transaction freeze shows little sign of improvement.

According to the Korea Court Registry Information Plaza on the 9th, the turnover rate for collective buildings nationwide (apartments, multi-family houses, row houses, officetels, etc.) last month was 0.41%, marking the lowest point since January 2013 (0.32%) in nine and a half years. The turnover rate is an indicator used to compare the vitality of the real estate sales market, calculated by dividing the number of real estate ownership transfer (sales) applications by the number of available properties for sale at the end of the month, then multiplying by 100. For example, a turnover rate of 0.41% means that out of 10,000 available properties, 41 were sold.

This figure had surged to 0.95% in December 2020, when real estate transactions were active, and was still 0.81% as of May last year. However, it sharply declined to 0.64% in June last year, dropped to 0.5% in January this year, and has remained below that level since.

By region, Daejeon recorded the lowest turnover rate at 0.25%, followed by Seoul (0.28%), Sejong (0.32%), Gyeongbuk (0.33%), Busan (0.34%), Gyeongnam (0.38%), and Daegu (0.38%). In contrast, Gangwon (0.67%) and Jeonnam (0.58%) showed relatively higher values despite the transaction freeze situation.

This decline in turnover rate appears to be related to a decrease in buyer demand. According to KB Real Estate monthly statistics, the buyer dominance index last month was 32.4, down 7.7 points from the previous month. Compared to the same month last year (101.5), it decreased by 68.1%. The buyer dominance index ranges from 0 to 200; a value above 100 indicates more buyers, while below 100 indicates more sellers. Last month, Daejeon, which had the lowest turnover rate, recorded an index of 16.2, Seoul 33.0, and Sejong 11.1.