Last year, as real estate transactions in the metropolitan area froze, the closures of local certified real estate agents have followed. With strengthened loan regulations and an expansion of domestic political uncertainty, transactions have become limited to extensions of existing monthly or lease contracts, leading many certified real estate agents to choose to change industries.
According to the real estate industry on the 15th, there are increasing cases of certified real estate offices in the metropolitan area, such as Seoul and Gyeonggi, ceasing operations or closing due to the impact of a real estate transaction cliff.
On the 5th, A, a representative of a certified real estate office located in Mia-dong, Seoul, noted, "There are no inquiries about new lease contracts, let alone housing sales. Many certified real estate offices in Mia-dong have closed down because there have been no transactions to the point where they could not sustain their livelihoods last year."
B, another representative from a real estate office in Mia-dong, also stated, "Renters are not looking for a new house; there is only demand to extend existing contracts," adding, "It's realistically difficult to cover rent and labor costs with the little re-contracting commission."
On the 9th, C, a representative of a certified real estate office located in Il-san Dong-gu, Gyeonggi Province, explained, "When the real estate market was good three years ago, certified real estate agents were busy enough to hire staff, but many now cannot even make rent after laying off all their employees," emphasizing that "particularly, those who rented in new towns with heavy rental burdens closed their offices after only a few months."
In fact, as of November last year, the number of certified real estate offices that had closed or suspended operations nationwide exceeded 13,000. The number of newly opened certified real estate agents has been on a downward trend for 21 consecutive months.
According to the Korea Association of Registered Real Estate Agents, as of the end of November last year, 769 new certified real estate offices opened nationwide, a decrease of 37 from the previous month (806 offices). In contrast, a total of 1,119 offices ceased operations or suspended operations (999 closures and 120 suspensions), meaning that the number of closed offices exceeded that of newly opened real estate offices.
The number of examinees for the certified real estate agent exam last year also reached its lowest level in eight years.
According to the Korea Association of Registered Real Estate Agents, a total of 154,699 people took the 35th Certified Real Estate Agent Qualification Exam, held on Oct. 26 last year. This is a decrease of about 45,000 compared to the previous year (200,059) and nearly 110,000 compared to 2022 (264,394).
This marked the first time since 2017 that the number of examinees fell below 200,000 and was the lowest since 2016 (183,867). As the number of candidates decreased, the number of passers also fell. In 2021 and 2022, there were 26,915 and 27,916 passers, respectively, but only 15,301 passers last year.
The real estate industry has analyzed that the recent strengthening of government loan regulations, which has led to a sharp decline in real estate sales transactions, has affected the increase in closures and suspensions of certified real estate offices.
A representative from the Korea Association of Registered Real Estate Agents said, "The reduction in certified real estate agents is an issue that can be resolved only when the volume of real estate transactions increases," adding that "it seems difficult for demand to recover quickly in all aspects, such as policy and market conditions, so the current situation where closures and suspensions outnumber openings is likely to continue."
It was also pointed out that the political instability spreading due to the emergency martial law situation at the end of last year contributed to the stagnation of real estate transactions.
Shim Hyung-seok, head of Woo Daebang Real Estate Research Institute, explained, "The government's tightening of loan regulations last year, combined with the emergence of political instability due to the martial law situation at the end of the year, had a decisive impact on the transaction cliff."
Seojin Hyung, a professor in the Department of Real Estate Law at Kwangwoon University, stated, "There must be at least minimal real estate transactions supporting the management of certified real estate offices, but the sharp decline in transactions is a major cause of closures," noting that "the demand for housing rental transactions has decreased by 75% compared to before, and commercial rental transactions have dropped to one-tenth due to the Commercial Lease Protection Act."
With expectations that the transaction cliff will continue this year, projections suggest that the difficulties for certified real estate offices will persist.
Shim noted, "There are no issues likely to drive an increase in real estate transactions in the first half of this year, resulting in a continuation of closures among certified real estate offices," but he also predicted, "If the impeachment situation is resolved in the second half of this year along with stabilization of interest rates and easing of loan regulations, transactions may become active."