Nationwide Commercial and Office Building Transaction Volume Hits 'Record Low' for Q3... Downtrend Continues

Q3 Transactions of Commercial and Office Buildings
Volume and Value Down 13.5% and 7.1%, Respectively, from Previous Quarter

In the third quarter of this year, nationwide transaction volume for commercial and office buildings fell to its lowest level for any third quarter since records began in 2021. Both transaction volume and value declined from the second quarter, while monthly transaction values fell consecutively from July through September, extending the downturn across the market.

According to Real Estate Planet, an artificial intelligence (AI)-based real estate company, nationwide commercial and office building transactions totaled 2,808 in the third quarter, down 13.5% from the previous quarter. Transaction value fell 7.1% quarter over quarter to KRW 8.8903 trillion. Compared with the same quarter last year, transaction volume declined 17.4% and transaction value fell 28%.

Monthly transaction volume fell from 1,034 in July to 879 in August, then edged up to 895 in September. Transaction value, however, declined for three consecutive months, from KRW 4.1277 trillion in July to KRW 2.6569 trillion in August and KRW 2.1057 trillion in September.

By province and metropolitan city, Gyeonggi Province had the highest transaction volume in the third quarter, with 625 deals. Seoul followed with 557, ahead of South Jeolla-Gwangju with 221 and North Gyeongsang Province with 197. Seoul accounted for KRW 5.68 trillion, or 63.9% of the nationwide transaction value. It was followed by Gyeonggi Province at KRW 1.4647 trillion, Busan at KRW 261.5 billion, Incheon at KRW 234.3 billion and Ulsan at KRW 204.7 billion.

Ulsan was the only region where transaction volume increased from the previous quarter, rising 4% to 52 deals. Transaction volume declined in all 15 other provinces and metropolitan cities.

Transaction value rose from the previous quarter in five regions. Ulsan recorded the highest increase, climbing 251.5% to KRW 204.7 billion. It was followed by South Jeolla-Gwangju at KRW 181.5 billion, up 23.8%; Daegu at KRW 140 billion, up 22.6%; North Gyeongsang Province at KRW 123.2 billion, up 11.5%; and Gyeonggi Province at KRW 1.4647 trillion, up 3%. Among the 11 provinces and metropolitan cities where transaction value declined, North Chungcheong Province had the smallest decrease at 5.6%, while Daejeon recorded the largest drop at 54%.

By price range, buildings valued at less than KRW 1 billion accounted for 1,662 deals, or 59.2% of the total. There were 861 deals (30.7%) in the KRW 1 billion to KRW 5 billion range, 148 (5.3%) in the KRW 5 billion to KRW 10 billion range, 103 (3.7%) in the KRW 10 billion to KRW 30 billion range, and 34 (1.2%) worth KRW 30 billion or more.

In Seoul, buildings valued at KRW 1 billion to KRW 5 billion accounted for the largest share of transactions, with 264 deals (47.4%) out of 557. They were followed by buildings valued at KRW 5 billion to KRW 10 billion (95 deals, 17.1%); less than KRW 1 billion (89 deals, 16.0%); KRW 10 billion to KRW 30 billion (84 deals, 15.1%); and KRW 30 billion or more (25 deals, 4.5%).

By city, county and district, Jung-gu in Seoul had the most transactions, with 70. It was followed by Jongno-gu in Seoul (67), Siheung in Gyeonggi Province (51), and Gangnam-gu in Seoul and Manse-gu in Hwaseong, Gyeonggi Province (41 each). Gangnam-gu in Seoul ranked first in transaction value at KRW 1.2088 trillion, followed by Mapo-gu in Seoul (KRW 819.9 billion), Yeongdeungpo-gu in Seoul (KRW 748.4 billion), Jung-gu in Seoul (KRW 475.1 billion) and Bundang-gu in Seongnam, Gyeonggi Province (KRW 437.9 billion).

“In the third quarter, both transaction volume and value in the nationwide commercial and office building market declined from the previous quarter, while monthly transaction value also fell for three consecutive months, pointing to an overall contraction,” said Jeong Sumin, CEO of Real Estate Planet. “Transaction volume fell particularly sharply for buildings valued at less than KRW 5 billion, which account for about 90% of all deals, while transactions involving buildings in the KRW 10 billion to KRW 30 billion range actually increased. With the gap between price segments widening, buyers should carefully assess the location and profitability of each asset.”

This content was produced with the assistance of AI translation services.