Impacts and Implications of Online Platforms’ Entry into the Real Estate Brokerage Sector

The Korean real estate brokerage sector has grown in size thanks to rising real estate prices and transaction volumes. Despite its importance, the industry offers low consumer utility and relatively slow innovation due to lack of incentives for competition in the quality of service and prices compared to other service sectors. As online platforms begin to offer the same services, however, the real estate brokerage market is showing signs of change, with stiffer competition, discounted fees, and improvements to the quality of service. As a result, consumers stand to benefit from better brokerage services at lower prices. Fears have risen, however, of online platforms charging higher fees to market players than other service sectors and engaging in unfair trade practices. Improving the competitiveness of the sector requires players in the market innovate. Moreover, policy measures are urgently needed to enable a win-win partnership between market players and online platforms in the sector