Seoul Little Building Last year, about 1,900 transactions
were made. “Long-term stagnation in building transactions”
It was found that the total transaction volume of small buildings worth less than 10 billion won among business and commercial real estate transactions in Seoul is significantly decreasing compared to the average year. Monthly, it seems to be showing a slight recovery, and most of the total transactions are as popular as the little building transaction days, but it is analyzed that the recovery of the transaction volume to the normal level is still far away.
According to the value map of the land and building big data platform on the 2nd, last year’s transaction volume of small buildings worth 10 billion won or less in Seoul recorded 1896 cases. By July of this year, there were 641 transactions, and although the first half had passed,안전놀이터 it was less than half of last year’s transaction volume. The transaction volume of the little building soared to 3096 in 2021 after going through 2482 cases in 2019 and 2856 cases in 2020.
A small building generally refers to a building with a sales price of less than 10 billion won among general buildings with a total floor area of more than 100m2 and less than 3000m2. In particular, there are many cases where the price is the standard, and 10 billion won is called the limit of the small building standard.
Year-over-year trading volume has declined significantly, but month-by-month it appears to be increasing slightly. The transaction volume, which was only 51 in January this year, increased to 120 in May. June recorded 105 transactions, accounting for 82% of all transactions.
Some in the real estate industry evaluate this increase in transaction volume as a recovery trend in the small building market. However, the overall trading volume actually decreased. According to R Square, a comprehensive commercial real estate service company, the number of business and commercial real estate transactions in Seoul in June was 128, down 13.5% from the previous month. There were only two large transactions worth 100 billion won, Bangbae-dong, Seocho-gu (147.4 billion won) and Cho-dong, Jung-gu (138.1 billion won).
In the industry, it is difficult to see the rise in the trading volume of small buildings as a recovery trend in the building trading market, and it is also difficult to see that the absolute trading volume will continue to increase. It is said that it is difficult to find a sale of less than 10 billion won in Seoul at a price that has already risen so much during the real estate boom. In addition, it is advised that if you are considering investing in a building in Gangnam that costs less than 10 billion won, you should consider the location. Most of the cases are due to poor location or too small buildings.
In particular, it is not easy to make market profits. There is a lot of demand for investment in buildings to pay for interest and other expenses with rental income and then sell them for capital gains. Recently, the impact of rising interest rates has made it difficult to invest, which is also affecting the view that it will be difficult to continue the recovery trend.
Jeong Kyung-jin, a value map researcher, said, “To see it as a recovery trend, the trading volume should be similar to that of the normal year, but since it is only half the level, some say that it may have entered a long-term stagnation.” The price is rising, but the interest rate is also high, so the cost of rent cannot be compensated, so the reality is that there are more transactions that are sold in a hurry after one year of sale than expected.”