The number of real estate agencies going out of business in the country was the lowest in 19 years in the first half of the year. Real estate agents appear to have earned more this year as their fees increased due to the rise in house prices.
According to the Korea Association of Realtors on Thursday, 5,822 real estate agencies closed business in the first half of this year and 421 have closed temporarily. This is the lowest number of closures in the first half of year since 2002 (5,153).
This is because real estate agencies have been able to earn bigger commissions per transaction due to the rise in house prices. According to the Korea Real Estate Board, the average apartment price in Seoul last month was 1.19 billion won. Applying the commission cap of 0.9 percent for houses over 900 million won, real estate agents can earn up to 9.98 million won per transaction. When they receive commissions both from the buyer and the seller, they earn almost 20 million won per transaction.
Another factor is an increase in transactions. Housing transaction last year amounted to 129,305, the highest since the government began collecting data in 2006. Housing trade in the capital area in the first half of this year was 278,340, down 18 percent from the same period of last year, but housing trade in non-capital areas was 280,983, still at the similar level the previous year (down 0.1%).
Against this backdrop, 9,302 real estate agencies went out of business in the first half of this year. As of late June, the country had the highest number of real estate agencies (117,738) as there were fewer closures and more openings. As people’s interest in real estate agent grew, a record number of people (408,492) signed up to take the country’s 32nd real estate license exam, which closed on Aug. 13.