Transaction Cliff Not Resolved... Real Estate Brokerage Openings at Lowest in 9 Years

New Business Openings Last Year Lowest Since 2013
Daegu, Ulsan, Gyeongnam, Sejong: Openings < Closures and Suspensions

[Asia Economy Reporter Noh Kyung-jo] Amid an unprecedented transaction cliff, the number of newly opened real estate brokerage offices nationwide last year recorded the lowest level in nine years since 2013.

According to the Korea Association of Realtors on the 27th, the number of new realtor openings nationwide last year was 14,757, the lowest since 2013 (15,816 cases).

Seoul real estate agency appearance / Photo by Yonhap News

The transaction cliff phenomenon, which intensified in the second half of last year, is unlikely to be resolved easily. Looking at the number of apartment sales in Seoul (based on contract date), except for February (816 cases), more than 1,000 transactions were made every month in the first half of the year. However, in the second half, ▲July 637 ▲August 669 ▲September 605 ▲October 558 ▲November 731 ▲December 801 transactions were recorded, which is about one-third of the highest monthly transaction volume in the first half (April 1,745 cases). Compared to 2021, when 5,760 transactions were made in January alone, this is close to a transaction extinction level.

Amid the severe transaction cliff, realtor closures have outpaced openings since August last year, and the gap has gradually widened. In particular, in December, the number of closures reached a monthly record high of 1,908 cases. This is the highest figure in the past five years.

Annual closures totaled 12,207 cases, and suspensions were 1,010 cases, both increasing compared to the previous year (closures 11,707 cases, suspensions 862 cases). By city and province, closures and suspensions in Daegu, Ulsan, Gyeongnam, and Sejong exceeded the number of openings. Especially in Daegu, even excluding suspensions (70 cases), closures (658 cases) outnumbered openings (604 cases).

Meanwhile, amid a continued wait-and-see stance, recent government easing of real estate regulations has slightly improved buying sentiment. According to the Korea Real Estate Board, this week’s nationwide apartment sales supply-demand index rose to 72.7 from 72.1 the previous week. The metropolitan area increased from 66.9 to 67.8, and Seoul rose from 65.8 to 66.0. The sales supply-demand index, which is expressed on a scale from 0 to 200, indicates that the lower the score is below the baseline of 100, the more sellers there are compared to buyers.