From January to November Last Year, Housing Sales Decreased by 15% Year-on-Year... Transaction Cliff Deepens

View of Seoul apartments from 63 Square. Photo by Hyunmin Kim kimhyun81@

From January to November last year, the volume of housing sales transactions decreased by 15.6% compared to the same period the previous year. Analysts suggest that the sharp rise in house prices has dampened buying demand, and ongoing government regulatory tightening has deepened the wait-and-see sentiment, exacerbating the 'transaction cliff.'

According to housing statistics released by the Ministry of Land, Infrastructure and Transport on the 4th, the nationwide housing sales transaction volume (based on reporting date) in November last year totaled 67,159 cases. This represents a 10.8% decrease from the previous month (75,290 cases) and a 42.5% decrease compared to the same month last year (116,758 cases).

The cumulative nationwide housing sales transaction volume from January to November last year was 961,397 cases, down 15.6% from the same period the previous year (1,139,024 cases).

In November, the sales transaction volume in the Seoul metropolitan area was 26,365 cases, down 17.6% from the previous month and 35.9% from the same month last year, while the provinces recorded 40,794 cases, down 5.8% from the previous month and 46.1% from the same month last year.

On a cumulative basis from January to November, the Seoul metropolitan area (457,654 cases) decreased by 21.0% compared to the same period last year, and the provinces (503,743 cases) decreased by 10.0%.

The decline in transaction volume was particularly evident in apartments. November apartment transactions (41,141 cases) plummeted 54.1% compared to the same month last year, whereas non-apartment transactions (26,018 cases) decreased by only 4.0%.

[Image source=Yonhap News]

Lease contracts increased somewhat compared to a year earlier. The total monthly rent transaction volume in November last year, combining data from the monthly rent reporting system and fixed-date registration, was 192,990 cases, up 1.6% from the previous month (189,965 cases) and 11.2% from the same month last year (173,578 cases).

The cumulative monthly rent transaction volume from January to November (2,136,182 cases) also rose 6.5% compared to the same period last year (2,006,401 cases).

Lease contracts increased more in the provinces than in the Seoul metropolitan area. The Seoul metropolitan area (128,382 cases) saw a 7.0% increase compared to the same month last year, while the provinces (64,608 cases) surged 20.5%.

Looking at lease types, the increase in monthly rent was more pronounced than in jeonse (a lump-sum deposit lease). November jeonse transactions (106,388 cases) increased 5.7% compared to the same month last year, while monthly rent transactions (86,602 cases) rose 18.7% during the same period.

As of the cumulative total up to November, the share of monthly rent transactions was 43.3%, up 2.8 percentage points from 40.5% in the same period last year. This is interpreted as a faster shift from jeonse to monthly rent due to increased property owners' holding tax burdens and tightened loan regulations making it harder for tenants to secure funds.

As the real estate market has recently begun to freeze, unsold housing units have also slightly increased. As of the end of November last year, the total number of unsold houses nationwide was 14,094 units, a 0.1% (19 units) increase from the previous month (14,075 units).

The number of unsold houses had rapidly decreased from 23,620 units in November 2020, to 15,270 units in March last year, and 15,198 units in July, but the decline has slowed recently as the provincial sales market has stalled.

The Seoul metropolitan area recorded 1,472 units, a 14.1% (182 units) increase from the previous month (1,290 units), while the provinces had 12,622 units, a 1.3% (163 units) decrease from the previous month (12,785 units).

By size, unsold medium-to-large units over 85㎡ numbered 402 units, a 1.3% increase from the previous month (397 units), and units 85㎡ or smaller totaled 13,692 units, a 0.1% increase from the previous month (13,678 units).

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