"Let's Share Office Rent by Sharing the Office" Even for Shared Offices
"We are handing over the customer ledger we have managed so far, along with all the office fixtures and supplies as they are. You just need to bring yourself."
As the real estate market sinks into an unprecedented transaction cliff with no signs of revival, the licensed real estate agent industry is also facing a harsh winter. The trend is not just about temporarily closing or shutting down offices; many are selling their offices, even handing over customer ledgers they have managed for years.
According to the Korea Association of Realtors on the 26th, 994 licensed real estate offices nationwide closed in August, and 72 suspended operations. Newly opened offices numbered 906. This means more offices closed than opened. Among the 17 metropolitan cities and provinces nationwide, all except Gwangju Metropolitan City and Daejeon Metropolitan City had more closures and suspensions than openings. The number of active licensed realtors last month was 118,888, down from 118,917 the previous month.
The Korea Association of Realtors’ website is flooded with posts about transferring (selling) brokerage offices. In September alone, there were 185 posts related to sales. This contrasts sharply with the monthly average of 10 to 30 posts registered until last year.
B, the representative of B Real Estate in Yangju, Gyeonggi Province, said, "Due to housing regulations and interest rate hikes, every region is struggling a lot," adding, "Eventually, I decided to put my brokerage office up for sale." As the number of office listings has increased in recent months, the terms of sale have rapidly shifted in favor of buyers.
B, the representative of B Real Estate in Seocho-gu, Seoul, said, "This office has been here since the building was occupied, so local residents are the main customers," adding, "All facilities and fixtures are fully equipped, and both the sales ledger and customer ledger are provided. You can start business immediately just by moving in." C, the representative of C Real Estate in Seo-gu, Incheon, who mainly handles listings near Geomdan New Town, emphasized, "We will provide all the customer management lists we have," and "Even novice agents can start business immediately at this location."
Some offices are choosing a 'shared office' system to reduce rent burdens instead of transferring their offices. They share leased space and split the rent in half, but operate their businesses independently. D, a representative of D Real Estate in Daechi-dong, Gangnam-gu, said, "Although it is a first-floor real estate office in a transportation hub, it is difficult to attract customers due to the development of the internet and the high monthly rent. As an alternative, we are looking for people to join a joint real estate office where the office space is shared but each registers under their own business name."
This environmental change in the licensed real estate agent industry is analyzed to be due to the real estate transaction cliff with no visible exit. Buyers have disappeared, sellers have increased, and unsold listings are piling up. As of the 26th, the number of listings (including sales, monthly rent, and jeonse) for Seoul apartments increased by 57%, from 76,910 a year ago to 120,805. In Gyeonggi Province, the number surged 108%, from 92,314 to 192,157 during the same period.
Buyer sentiment is also increasingly subdued. According to the Korea Real Estate Board, the Seoul apartment sales supply-demand index last week recorded 79.5, down from 80.2 the previous week, breaking below the 80 mark. This is the lowest in 3 years and 3 months since the fourth week of June 2019 (78.7). The sales supply-demand index being below the baseline of '100' means there are more people wanting to sell houses than those wanting to buy.
Continued interest rate hikes, falling house prices, and the transaction cliff are forecasting an even harsher winter for the licensed real estate agent industry. E, the representative of E Real Estate Office in Gayang-dong, Yangcheon-gu, said, "As transactions become extinct, the number of offices struggling to pay monthly rent is rapidly increasing," adding, "Recently, some offices are even giving up on key money completely to sell their offices quickly."
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