New Real Estate Agency Openings Hit Lowest Level Since IMF Crisis [Real Estate A to Z]

A real estate property in a commercial building in Songpa-gu, Seoul. Photo by Yonhap News Agency

Last year, the number of newly opened real estate agencies was the lowest since the International Monetary Fund (IMF) financial crisis era.

According to the Korea Association of Realtors on January 21, a total of 9,150 new real estate agencies opened nationwide last year. This is the lowest figure since 7,567 in 1998. Meanwhile, 11,297 agencies closed and 1,198 suspended operations last year.

The number of real estate agencies that closed or suspended operations has exceeded the number of new openings for 2 years and 11 months, from February 2023 to December of last year.

The association explained, "The decrease in operating real estate agencies last year was mainly due to a drop in new openings, not an increase in closures," adding, "This is because stricter regulations have led to a sharp decline in listings and transaction volume, significantly worsening profitability."

As of December last year, there were 109,320 operating real estate agencies, down by 2,474 from 111,794 in January of the same year. The number of operating agencies fell below 110,000 for the first time in about five years since 2020.

Considering that there were 551,879 licensed real estate agents nationwide at the end of last year, only about one in five was actually running an office.

The downturn in the real estate brokerage sector began in earnest in the second half of 2022, when housing prices started to fall and transaction volumes decreased. Since then, the industry has remained mired in stagnation.

In particular, the brokerage sector was hit hard by the June 27 Measures, which limited the maximum mortgage loan amount in the Seoul metropolitan area to 600 million won, and by the October 15 Measures, which designated all 25 districts of Seoul and 12 areas in Gyeonggi Province as land transaction permit zones. These policies further reduced both the mortgage loan limit and transaction volume.