Real Estate Market Said to Be 'Stirring'... Licensed Realtors Still Sighing

3 Consecutive Months of Real Estate Agents Closing or Suspending Business > Opening
Recent Transaction Volume Base Effect... Concerns of a 'Double Dip'

Despite the spring peak season amid the soft landing atmosphere in the real estate market, the brokerage industry remains bleak. Although localized increases in transactions are appearing, the overall transaction volume has not fully recovered.

Appearance of a licensed real estate agency in Seoul city / Photo by Yonhap News

According to the Korea Association of Realtors on the 24th, the number of realtor openings nationwide in April this year was 1,132, the lowest for the same month in the past five years. It is also the lowest monthly figure this year.

On the other hand, realtor closures last month were 1,242, down from the previous month (1,341), but higher compared to January (1,115) and February (1,156). In particular, closures have recorded over 1,000 cases for six consecutive months since October last year (988 cases). Suspensions have also maintained triple digits for six months.

As a result, nationwide realtor closures plus suspensions have exceeded openings for three consecutive months. This phenomenon had continued since August last year and reversed in January this year but was only temporary.

By city and province, Seoul showed the largest gap between openings and closures plus suspensions. Especially, realtor closures plus suspensions south of the Han River (222 cases) exceeded openings (171 cases) by 51 cases. Next, southern Gyeonggi had 237 openings and 281 closures plus suspensions, a difference of 44 cases. Chungbuk and Jeju saw openings surpass closures plus suspensions.

An association official said, "Realtors are a profession affected by real estate transaction volumes, and many expect it will take a considerable time to recover. On the front lines, the spread of jeonse fraud issues is causing significant difficulties due to tenants' avoidance of jeonse and declining trust."

According to the Seoul Real Estate Information Plaza, apartment transactions in Seoul last month reached 3,103, the highest in 1 year and 8 months. This is over 1,000 more than the same month last year (1,741). However, compared to April 2021 (3,657), April 2020 (3,034), and April 2019 (3,051), before prices fell, it is an average level. Transactions from January to March were well below usual levels.

Buyer sentiment is also improving but remains precarious. According to the Korea Real Estate Board, last week the Seoul apartment sales supply-demand index rose to 78.4 from 77.3 the previous week. It has been gradually recovering since hitting a low of 63.1 at the end of last year. Nationwide, the sales supply-demand index was 83.1 and the jeonse supply-demand index was 83.9, slightly up from the previous week (82.3 and 83.3 respectively).

However, these figures are still below the baseline (100), indicating that there are more sellers than buyers. There are concerns about a "double dip," where even if housing prices hit a short-term bottom, demand decreases again, causing prices to fall further.

Kim Gyu-jung, head of the Asset Succession Research Institute at Korea Investment & Securities, said, "The recent increase in transaction volume was influenced by a base effect. It is too early to see it as a trend. It is difficult to say that the impact of the sharply rising interest rates in a short period has fully subsided, and since the economy is generally sluggish, it is highly likely that weak housing prices and transaction volumes will continue from the demand side."