Transaction Cliff... Increasing Number of Real Estate Agents Closing Shops to Seek Employment

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Brokerage Fee Reduction Also a Direct Blow

Barely Sustained by Jeonse and Monthly Rent Transactions

Net Decrease in Brokerage Offices in Northern Seoul

[Asia Economy Reporter Kim Min-young] Mr. A, who used to run a brokerage office in Cheongju, Chungbuk, recently got a job at a sales promotion agency in the Seoul area. After Cheongju was designated as a regulated area under the June 17th measures last year, transactions sharply declined, and with brokerage fees reduced starting this October, he judged that it was difficult to make a living as a licensed real estate agent. Mr. A said, "With fewer transactions, even paying rent became burdensome," adding, "I thought it would be better to work steadily at a sales promotion agency."

With the brokerage fee reduction policy coinciding with a transaction cliff, brokerage offices are increasingly closing or suspending operations. According to the Korea Association of Realtors on the 2nd, nationwide licensed realtor openings recorded 1,143 cases last October. After hitting a two-year low of 994 cases in August, the numbers slightly increased in September (1,095 cases) and October, but compared to 1,883 cases in January, there is a clear downward trend. Especially in the 14 districts north of the Han River in Seoul, openings were only 92, while suspensions and closures reached 107, resulting in a decrease in the number of brokerage offices. Major metropolitan cities designated as regulated areas, such as Busan, Daegu, Gwangju, and Ulsan, also saw the number of closed brokerage offices exceed newly opened ones.

Mr. B, who operates an office in Nowon-gu, said, "Since September, the transaction slump has continued, making it difficult to close even one or two deals a month," adding, "I am barely maintaining the office through jeonse and monthly rent transactions."

As income from housing transaction commissions sharply decreases, more licensed realtors are reemployed at sales agencies. A representative from the Korea Association of Realtors said, "Many licensed realtors who have opened offices are worried about making a living immediately due to reduced commission income and a sharp drop in transactions."

With housing transactions shrinking, more licensed realtors are turning their attention to niche products such as officetels and knowledge industry centers. Mr. C, who used to run a brokerage office in Asan, Chungnam, recently moved to the Dongtan district in Hwaseong. This move was to shift his business to brokering knowledge industry centers and officetels, which are increasing in supply in the area. Mr. C said, "With the reduction in housing brokerage fees and a decline in apartment transactions, I moved to focus on knowledge industry centers and officetel brokerage," adding, "The commission rates are also relatively higher compared to housing, which is an advantage."

This content was produced with the assistance of AI translation services.