SEOUL, August 19 (Korea Bizwire) – South Korea’s real estate agents are beset with enemies of all stripes as they come under increasing pressure from government and public opinion to cut real estate commissions.
There are many consumer complaints about real estate brokerage fees, which are prorated to the selling price of a home.
Despite the sharp increase in commissions resulting from the recent surge in house prices, the quality of service from real estate agents remains unchanged.
After the Anti-Corruption and Civil Rights Commission, a state anti-corruption watchdog, presented recommendations to change the real estate commission system in February, the Ministry of Land, Infrastructure and Transport and The Korean Research Institute for Human Settlements wondered how to improve the system.
The final version is expected to be released by the end of the month.
Officials from the Korean Association of Realtors, however, claimed that despite the increase in the share of high-priced deals, there had been no significant impact on the overall income of realtors.
“Of the 110,000 real estate agents in the country, 55% are simplified taxpayers with an estimated average annual income of around 15 million won (US $ 12,790),” said Kim Kwang-ho, general secretary of the association.
There are two factors behind this situation. First, the number of transactions has decreased due to government regulations.
“The number of apartment sales transactions stood at around 500,000 cases during the period from January to July of last year. However, this figure fell by 22.3% to 386,000 cases during the same period of this year, ”said Yoon Sang-hwa, director of the association.
Another factor is the constant increase in the number of real estate agents.
According to statistics from the Ministry of Land, Infrastructure and Transport, the number of real estate agents in the second quarter of this year stood at 117,738, the highest level in history.
This figure represents a growth of 6,722 individuals compared to 111,016 six months ago.
Another cloud clouding the outlook for real estate agents is the emergence of so-called “proptech” companies such as the real estate start-up Zigbang Co. which are armed with cutting-edge technology.
After collecting and analyzing information on homes for sale, proptech companies are using virtual reality (VR) technology to make it easier for consumers to find the homes they want simply through smartphones without the need for legwork.
In particular, these companies threaten the lives of existing real estate agents due to low real estate brokerage fees.
Thus, Dawin Property, a real estate brokerage company launched in May 2019, saw the number of monthly users of its site exceed 100,000 at the end of July 2021.
JS Shin ([email protected])