This Business Used to Be Much Better Than a Salary Job... "Now All That's Left Is to Take Down the Sign"

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[The Financial News] The number of newly opened licensed real estate offices last year dropped to the lowest level since 1998, right after the International Monetary Fund (IMF) foreign exchange crisis. In contrast, more than 10,000 brokerages shut down, with an average of 31 closures a day. It was a year when closures outnumbered openings, making "closing up shop" the more common outcome.■ Openings disappear, closures become routineAccording to the Korea Association of Realtors on the 21st, there were 9,150 newly opened licensed real estate offices last year. This is the lowest figure since 1998, at the height of the IMF crisis, when there were 7,567. For the entire year, there was not a single month in which openings reached even 1,000.
Closures, on the other hand, barely paused. A total of 11,297 licensed real estate offices shut their doors last year, meaning an average of 31 brokerages took down their signs each day. As a result, the number of operating licensed real estate agents nationwide fell to 109,320, marking 35 consecutive months of decline since February 2023. In October last year, the total even dropped below 110,000 for the first time in five years and two months.
Within the industry, people openly say, "Next, the 100,000 mark will collapse." Even the so-called "100,000-agent last line of defense," which had held since May 2017, is no longer seen as secure.■ Transactions are frozen, income evaporatesThe main reason for the decline in the number of agents is, without question, deteriorating profitability. Tough regulations combined with sluggish transactions have pushed the market into a prolonged slump.
Ironically, despite the shrinking headcount, insiders still describe the sector as oversaturated. The number of agents considered appropriate for the market is around 70,000 to 80,000. Compared with current levels, that means there are 30,000 to 40,000 too many.
This trend is clearly visible at the exam sites as well. The number of applicants for last year’s licensed real estate agent exam was 116,472, a drop of more than 38,000 in just one year.■ Side jobs and partnerships still "not enough"Licensed real estate agents are trying various survival strategies, including corporate partnerships, side jobs, and consulting services. However, many say these efforts are far from enough to turn the situation around.
Kim Jong-ho, president of the Korea Association of Realtors, said, "As the government pours all its efforts into curbing housing price increases, the damage suffered by genuine homebuyers and licensed real estate agents is being pushed aside," adding, "Even now, it is urgent to come up with concrete measures to normalize the market."
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cynical73@fnnews.com Reporter Kim Byung-deok Reporter