Building Transaction Amount Nationwide in September Drops Over 60% Compared to Same Month Last Year

[Asia Economy Reporter Kim Min-young] As the real estate market continues to slump, both the transaction amount and volume in the commercial real estate sales market have sharply declined. In particular, the transaction amount in Sejong City plummeted by 97% compared to the same period last year, while Seoul and Incheon also shrank by more than 60%. As the interest rate hike rally continues due to prolonged inflation, the commercial real estate market downturn is expected to persist for the time being.

On the 8th, Real Estate Planet analyzed the actual transaction prices from the Ministry of Land, Infrastructure and Transport and found that as of September, the total sales amount of commercial real estate, including commercial and office buildings, shops, and offices, was 2.7 trillion won, down 61.9% from 7.1 trillion won in the same month last year and down 51.8% from 5.6 trillion won in the previous month. The sales amount of commercial and office buildings decreased by 66.5% year-on-year, and shops and offices decreased by 50.1%.

The transaction volume also dropped significantly. As of September, the number of commercial real estate transactions was 4,024, down 42.2% compared to 6,965 transactions in the same month last year. It also decreased by 25.6% compared to August (5,407 transactions). In particular, the transaction volume of commercial office buildings decreased by 50.1% year-on-year, and shops and offices shrank by 39% compared to the same month last year.

By region, Sejong City experienced the largest decline in transaction volume. In September, only one transaction was completed in Sejong City, representing a 90% drop compared to the same month last year. Following Sejong City, transaction volumes decreased by 68.2% in Seoul, 64.6% in Incheon, 60% in Ulsan, and 59% in Gyeonggi Province. During the same period, transaction amounts decreased significantly in Sejong City (-97%), Daejeon (-85.4%), Busan (-75.1%), Jeju (-73%), and Gyeongsangnam-do (-72.7%). Transaction amounts in Seoul and Incheon also fell by 67.4% and 68%, respectively.

With the prolonged COVID-19 pandemic, the commercial and office building transaction volumes in Busan and Jeju, which had withstood the real estate downturn thanks to leisure demand, also could not avoid a downward trend. The transaction amounts sharply dropped within a month, with Jeju and Busan decreasing by 80.6% and 80.4%, respectively, compared to the previous month. Regions recording a decline of over 60% compared to the previous month include Gyeonggi Province (-64.4%), Sejong City (-63.5%), and Seoul (-61.5%).

Jung Soo-min, CEO of Real Estate Planet, said, "Due to the prolonged global inflation and successive big steps in interest rate hikes, the overall real estate market is in recession, and the commercial real estate market appears to be continuously affected."

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