Non-Apartment Transactions Nationwide from January to May This Year Decrease by 44% Compared to Last Year
From January to May this year, the nationwide housing (detached houses, multi-family houses, multiplex houses, row houses, and apartments) sales volume recorded the lowest level ever. In particular, the sales volume of non-apartment housing decreased by 44% compared to last year, which appears to be influenced by the aftermath of jeonse fraud, relatively low investment value, and liquidity issues.
On the 5th, Economic Manlab, a real estate information provider, reviewed the housing sales transaction status from the Korea Real Estate Board and found that the nationwide housing sales volume from January to May this year was 222,016 cases. This is a 14.6% decrease compared to the previous year (259,956 cases) and the lowest sales volume since the Korea Real Estate Board began compiling related statistics in 2006 (based on January to May).
The nationwide housing sales volume hit a record low mainly because the sales volume of non-apartment housing sharply declined. From January to May this year, the nationwide non-apartment housing sales volume totaled 58,201 cases, down 44% from last year (103,969 cases), marking the lowest ever. Specifically, the sales volumes of detached/multi-family houses and row/multiplex houses were 23,542 and 34,659 cases respectively, down 38.8% and 47.1% compared to the previous year.
The reasons non-apartment housing is being shunned include recent jeonse fraud incidents, low investment value, and poor liquidity. As jeonse fraud has occurred mainly in non-apartment housing, demand is steadily decreasing. Additionally, unlike apartments, non-apartment housing has poor liquidity and limited capital gains, leading both end-users and investors to turn their attention to apartments.
On the other hand, apartment sales volume has been recovering since regulatory easing was implemented earlier this year. Nationwide apartment sales volume from January to May last year was 155,987 cases, marking a record low, but from January to May this year, it rose 5.0% year-on-year to 163,815 cases.
In particular, apartment sales volume in Sejong City increased by 94% year-on-year, from 1,343 cases in January to May last year to 2,605 cases in the same period this year. Apartment sales volume in Daegu also rose 72.7% year-on-year, with increases in Seoul by 68.9%, Incheon by 66.3%, Daejeon by 41.2%, Gyeonggi by 38.9%, and Busan by 14.1%.
Hwang Hansol, a research analyst at Economic Manlab, said, “During periods when apartment prices were rising, villas and detached houses served as substitutes, but due to government real estate regulatory easing and apartment price declines, housing demand is shifting toward apartments. The sales market atmosphere between apartments and non-apartments may diverge.”
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