Many Real Estate Agencies Closed... "January as Opening Season" Is a Thing of the Past

Real Estate Agencies Opening at Record Low
Closures and Suspensions Increase for 3 Consecutive Months

Last month, for the first time ever, the number of real estate agents who took a break or closed their businesses surpassed the number of newly opened real estate agencies. This is analyzed to be due to a sharp decline in new openings and an increase in breaks and closures caused by reduced brokerage demand amid a transaction freeze.

According to the Korea Association of Realtors on the 21st, 1,117 real estate agents opened businesses nationwide in January. This is the lowest number recorded for January since the association began compiling statistics in 2015. This figure peaked at 2,550 in January 2018, then dropped below 2,000 the following year, and further declined by 36% from 1,993 in 2022 to 1,275 in 2023.

On the other hand, the number of real estate agents who took a break or closed their businesses was 1,304 (1,177 closures and 127 breaks), an increase of 59 compared to 1,245 in January last year. This figure has been rising for three consecutive months, recording 970 in 2021 and 1,059 in 2022.

As a result, the number of breaks and closures surpassed new openings for the first time in January. January is usually the month with the highest number of real estate agency openings. This is because brokerage demand increases just before the spring moving season, and new agents who passed the real estate agent exam at the end of each year complete their training and start their businesses. Except for 2015 and last year, January has historically had the highest number of openings.

The industry analyzes that the real estate market downturn and weaker housing transactions compared to previous years have significantly reduced brokerage demand. In a situation where brokerage fees are decreasing, the burden of rent and labor costs grows, leading agents to postpone openings or decide to take breaks or close their businesses. Last year, nationwide real estate transactions totaled 1,006,019, down 8.8% from 1,102,854 the previous year, marking the lowest since the Ministry of Land, Infrastructure and Transport began disclosing actual transaction prices in 2006.

A representative from the Korea Association of Realtors stated, “It is unusual for the number of real estate agent openings in January to be lower than the number of breaks and closures, and the number of agents taking breaks to receive key money or close their businesses has also significantly increased.”