Property market problems ripple into the wider economy

Residence complexes are seen from the Lotte World Tower in Songpa District, southern Seoul, on Nov. 30. [NEWS1]

 
Troubles in the actual property market are spilling over into different elements of the economic system, with property brokers, inside design companies and movers feeling the results of the downturn.  
 
“Not even the IMF disaster, the worldwide monetary disaster and even the Covid-19 pandemic had been as dangerous as at the moment,” mentioned Goo Sam-jin, a CEO of a transferring firm in Gwanak District, southern Seoul.
 
He mentioned he hasn’t seen something like this in 30 years of enterprise.  
 
“Whereas enterprise is on the decline, labor prices maintain going up,” Goo mentioned. “I don’t know the way lengthy I can maintain on below these circumstances.”  
 
In a great yr, he will get 100 transferring jobs in a single month. Final month, he did 40.  
 
He often will get paid between 900,000 received and 1 million received for a transferring job utilizing a single 5-ton truck.  
 
The 4 transferring staff get 120,000 to 180,000 received every. When including different bills, together with gas, he solely pockets 100,000 received on a single job.  
 
Amid charge will increase by the Financial institution of Korea and better taxes, the variety of property transactions has declined.  
 
In keeping with the Ministry of Land, Infrastructure and Transport, within the first 10 months of this yr, 449,967 housing models had been bought nationwide.  
 
That’s roughly a 50 % drop from 894,238 models throughout the identical interval final yr.  
 
In Seoul in October, solely 900 residences had been purchased, which is one third of the two,839 models within the year-earlier interval.  
 
Within the first 11 months of the yr, 48 models had been traded on the 9,510-unit Helio Metropolis house advanced in Songpa, southern Seoul. That’s a pointy drop in comparison with the 166 models throughout the identical interval final yr.  
 
Actual property brokers had been straight hit by the drop in transactions.  
 
Within the first 10 months of the yr, 9,936 actual property businesses both closed store or suspended enterprise briefly.  
 
“We solely made one profitable transaction this yr,” mentioned Web optimization Jae-pil, who represents an actual property company in Nowon District, northern Seoul. “The quantity dropped to round 10 % of the earlier yr.”
 
An actual property company in Seongdong District, japanese Seoul, needed to fireplace an worker in September, saying they felt strain in assembly payroll.
 
“Each month we needed to pay 1.5 million received on high of meal bills, however there have been extra days that the worker had nothing to do,” mentioned the proprietor of the actual property company.  
 
The proprietor of a transferring firm primarily based in Suwon mentioned a few of his staff are taking different jobs, similar to supply or designated drivers, as there aren’t any jobs in the course of the day.  
 
An inside design firm proprietor in Songpa, Seoul, has suspended enterprise for the final two months.  
 
“Folks may solely afford to renovate their residences when the actual property market is sweet,” Music mentioned. “However these days, there are none.”  
 
The inside design store proprietor mentioned he would often get 4 to 5 contracts a month particularly as his workplace is positioned close to an enormous house advanced.  
 
However he hasn’t obtained any main renovation jobs since October, and his schedule for this month can also be empty.  
 
“I’m barely holding on with small jobs similar to repairing pipe leaks and heating programs,” Music mentioned. “It’s like I’m in a sport in competing to see who lasts lengthy earlier than folding enterprise.”  
 
Specialists argue that the federal government must give you measures that will assist enhance housing transactions, similar to by decreasing taxes.  
 
“Transactions needs to be inspired by decreasing the acquisition tax,” mentioned Kim Sung-hwan, an affiliate analysis fellow on the Development & Financial system Analysis Institute of Korea. “Solely then will associated industries, particularly small companies, revive.”  
 
 
 

BY HWANG EUI-YOUNG [cho.jungwoo1@joongang.co.kr]