Record number of real estate agent exam candidates amid booming market

Candidates for the country’s 31st test for licensing real estate agents enter Mirae High School of Science and Technology in Nowon District, north of Seoul on October 31. [NEWS1]

With the housing market overheating, the number of applicants taking the state-sponsored test to become a licensed real estate agent has hit an all-time high this year.

A total of 343,076 applicants took the country’s annual test for real estate agent licensing, which took place at 460 locations across the country on October 31. The number has increased by 13% in one year. This was the highest number of applicants since 1983, when the test was first introduced.

Six in ten applicants this year were in their 30s and 40s, according to the Korea Human Resources Development Service. Of all applicants, around 32% were in their 40s while 29% were in their 30s.

The recent growing popularity of real estate agents as a career is in large part due to the possibility of high commissions they receive when real estate prices rise.

Under Korean law, real estate agents in Seoul can charge up to 0.9% on both sides of a transaction. If a buyer purchases a property worth 1 billion won ($ 882,000) through a real estate agent in Seoul, the agent can get around 9 million won from both buyer and seller, which represents a total of 18 million won.

About half of all apartments in Seoul are priced at 900 million won or more, according to a report by KB Kookmin Bank.

Opening a real estate agency is risky. As many Koreans abandon their quest to buy property amid tighter real estate regulations, many agencies have gone bankrupt.

According to the Korea Association of Realtors, about 1,087 real estate agencies closed in July – and that number rose to 1,097 in August. Meanwhile, 1,302 branches were recently opened in August, a drop of 11.3% from the previous month.

In September, the Ministry of Economy and Finance finalized the country’s record budget for 2021. According to the plan, a total of 13.3 billion won will be allocated to apply blockchain to 19 new domains, which includes l ‘introduction of a system allowing people to carry out real estate transactions without real estate agencies or agents.

In response, the Korea Real Estate Association held a rally on September 24 urging the government to end the plan outside the National Assembly in western Seoul.

Real estate commissions can be adjusted to ease the burden on housing seekers.

“With the increase in house prices, many people are suffering from high commissions,” Kim Hyun-mee, Minister of Land, Infrastructure and Transport, said on October 16. “As many agents are also feeling overwhelmed by the decrease in the number of real estate transactions, we have just started to monitor the market.

Shim Kyo-eon, professor of real estate at Konkuk University, said people should be careful when opening real estate agencies as these are the lines of business that are easily affected by the financial situation of the country.

“As there has been a growing interest in [real estate market] Due to the recent spike in real estate prices, those facing a shortage of jobs have turned to acquiring a real estate agent’s license, ”added Shim.

BY HAN EUN-HWA, CHEA SARAH [[email protected]]

Penny D. Jackson