140 Brokerage Sale and Transfer Posts in One Day
9,265 Closures and Suspensions from Jan to Jul Exceed 7,942 Openings
Transaction Area Concentration and Non-Apartment Lease Contraction Seem to Impact
"Real estate transfer within the complex. Due to urgent circumstances, the key money is offered at a low price. Negotiations are also possible.", "Real estate office available without key money. It is a real estate office where you can start lightly and without burden during difficult times."
On the direct transaction board of the Korea Association of Realtors website, 140 posts about brokerage office sales (transfers) with similar content were uploaded in just one day on the 22nd. Recently, dozens of posts aimed at disposing of brokerage offices have appeared daily on this board.
Although various indicators reflecting the real estate market have shown signs of recovery recently, a cold wind still blows in the licensed real estate agent industry. While transaction volumes are picking up mainly in the metropolitan area, there is a large disparity in real estate market conditions by region and complex, and the rental market for non-apartment properties has shrunk due to the aftermath of reverse jeonse and jeonse fraud.
In fact, the number of licensed real estate agents who have temporarily closed or permanently shut down their businesses exceeds the number of newly opened agents. According to the Korea Association of Realtors on the 23rd, from January to July this year, 9,265 agents temporarily closed or closed their businesses, which is more than the 7,942 newly opened agents. Among them, 8,422 agents chose to close permanently, and 843 temporarily closed their businesses.
Until now, the number of newly opened agents was higher than those temporarily or permanently closed, but since August last year, the number of temporarily or permanently closed agents has surpassed the number of newly opened agents. This is in contrast to the recent trend where real estate prices have stopped declining and transaction volumes are gradually increasing.
The increase in brokerage offices choosing to temporarily close or close permanently is due to the large disparity in real estate market conditions by region and complex, as well as transaction volumes still not reaching average levels. According to the Seoul Real Estate Information Plaza on the 23rd, the number of apartment sales in Seoul in July was 3,436 as of that day. This is an increase compared to last year when the transaction cliff was severe due to interest rate hikes, but still fewer than during the real estate boom periods of 2020 and 2021. It is even less than August 2021 (4,065), which was called the 'end of the boom.'
Ko Jun-seok, CEO of J.Edu Investment Advisory, said, "Licensed real estate agents are inevitably greatly affected by real estate transaction volumes. Although transaction volumes have increased this year, it is only about 50-60% compared to the real estate boom period. Moreover, since the transactions are concentrated in some key areas and large complexes, brokerage offices in non-major areas inevitably face operational difficulties."
The rental market for non-apartment properties has also shrunk due to the aftermath of reverse jeonse and jeonse fraud, which has affected temporary or permanent closures. The anxiety surrounding the rental market for villas and other non-apartment properties has increased due to jeonse fraud and reverse jeonse or 'empty jeonse' cases, causing damage to licensed real estate agents who mainly broker these properties.
A licensed agent in Mapo-gu, Seoul, said, "This is a promising area with large apartment complexes like MaraePu (Mapo Raemian Prugio) nearby, but the number of walk-in clients is only about 1-2 per month, and no transactions have been made for several months." He added, "Licensed agents who mainly handle villas and similar properties cannot sustain their businesses but cannot afford the monthly rent, so there is a mood to give up key money and put their brokerage offices up for sale."
An official from the Korea Association of Realtors said, "In Seoul, the volume of apartment rental transactions this year is higher compared to the first half of last year, but transactions of detached houses, multi-family houses, and row houses have sharply declined. Since risks such as the reverse jeonse crisis remain in the second half of this year, licensed real estate agents seem to be choosing temporary or permanent closure rather than enduring the situation."
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