Last month, the proportion of direct transactions that did not go through a realtor in apartment sales in Seoul exceeded 30% for the first time. The proportion of direct transactions for apartments nationwide also exceeded 20%. At the worst transaction cliff in history, an analysis comes out that the landlord puts up a sale on an online platform and seeks a buyer, a ‘new wind in the recession’.
As a result of analyzing the real estate transaction status disclosed by the Ministry of Land, Infrastructure and Transport by the Korea Economic Daily on the 20th, 218 cases, or 32.58%, of the 669 apartment sales in Seoul in November were counted as direct transactions. In the Seoul apartment sales market, the proportion of direct transactions, which stayed at 12-14% from August to October, surged in November. The direct transaction phenomenon is spreading across the country. Of the 13,731 apartment sales nationwide last month, 2,830, or 20.61%, were direct transactions. It jumped significantly compared to November last year (14.04%) and October this year (16.94%).
When the house is not sold even in a ‘quick sale’, it is analyzed that it is running to a direct transaction platform that can go beyond regional limits and find a buyer. Another advantage is that there are no brokerage fees. As word of mouth spreads that it is possible to find a buyer quickly, dozens of items for urgent sale are pouring into Naver Cafe, such as ‘Peter Pan’s Good Room’, which evolved from Naver Cafe to a platform, and Naver Cafe, ‘Pajikka’. Carrot Market, a second-hand trading platform, also set up a separate real estate direct transaction section and joined in arranging direct transactions.
Lee Jong-hyeok, head of the Korea Realtors Association, said, “In the past, direct transactions were mostly for the purpose of tax evasion or wholesale sales by dealers, but recently, as transactions are rare, direct transactions between individuals are taking place and the proportion is increasing.”
1 out of 3 cases in Seoul are direct transactions “Let’s sell the house quickly somehow”
“Yesterday’s direct transaction price is today’s brokerage transaction price.”
In September, Misa Riverside City Verace (exclusive area 84㎡) in Hanam, Gyeonggi-do was directly traded at 855 million won, 115 million won lower than the transaction price three months ago. At the time, there was controversy over the sale of gift women, but as the brokerage transaction was concluded next month at 750 million won, 100 million won lower, direct transaction became the standard for actual transaction. In November, the fact that the proportion of direct transactions in apartment sales in Seoul exceeded 30% for the first time and reached 20% nationwide is interpreted as meaning that direct transactions are becoming a daily routine beyond the level of ‘gifts disguised as sales’.
○Landlord, for sale and platform
The ratio of direct real estate transactions is increasing not only in apartment sales but also in overall housing such as townhouses and multi-housing. According to the Ministry of Land, Infrastructure and Transport on the 20th, the proportion of direct transactions for row houses and multi-housing sales nationwide last month was 36.77%, exceeding 29.9% in the same period last year. Due to the influence of the reverse tax crisis, the number of items for urgent tax on the platform is also increasing. Yoo Kwang-yeon, CEO of ‘Getting a Good Room for Peter Pan’, said, “In the past, one- and two-room rentals and monthly rents were mainly traded directly, but recently, dozens of apartments for sale are posted a day, and the number of views is amazing.”
The number of apartments for sale on the platform is rapidly increasing as the transaction cliff intensifies. Apartment sales in Seoul, which averaged 6,500 per month over the past 10 years, have plummeted to around 700 to 800 this year. As the house that was put on sale at the brokerage house has not even been inquired for several months, the landlord is looking for an online platform that investors across the country are looking for and promoting it himself. In the case of a 58㎡ exclusive area for Jugong Apartment in Nowon-gu, Seoul, which was listed on the direct transaction cafe ‘Pajikka’, it was put up for sale at the lowest price on Naver. The listings posted on the platform were accompanied by explanations such as “You can trade lower than Naver’s lowest price” and “You can adjust the amount if you wish to buy.”
Buyers are also flocking to the direct transaction platform by word of mouth. Through the platform, tips for carefully checking the identity of the seller, copy of the register and building ledger, review of special contracts, and transaction reporting and registration are shared. It is common to pay regarding 500,000 won to a brokerage office near your house and ask them to join the transaction and write the contract.
Banks, which were reluctant to lend if contracts were not signed by real estate agents, are changing. Hana Bank preemptively launched direct transaction loans. An official from Hana Bank said, “There are many additional items to check for direct transactions, so other banks do not handle them well, but we are proceeding with loans in line with the recent increase in direct transactions.”
The platform is also competitively preparing transaction safety services such as escrow services and electronic contracts that take care of the transaction price until the name transfer.
○ Sense of crisis in the brokerage industry
Real estate brokerages faced a double whammy as direct transactions increased in a situation where transactions almost ceased. As landlords put their property on the platform instead of a brokerage agency, there is a sense of crisis that their ‘holding power’ may weaken. As mobile platforms such as direct rooms and cafes promoted direct entry into the market, the brokerage industry defended the market by carrying out a ‘sales shutdown campaign’ that does not share properties with landlords. Recently, however, there have been cases where the landlord instead makes a request, saying, “Since I brought a buyer (from a direct transaction platform), let me broker it, but charge only half the commission.”
Lee Jong-hyeok, chairman of the Korea Realtors Association, said, “If the platform operates legally, there is no way to stop it, and there is no plan to apply unfair pressure.”
Reporter Hyunil Lee hiuneal@hankyung.com
