Will the Soaring Busan Apartment Prices Fade Again... Continued Slowdown in Growth Rate

Ministry of Land, Infrastructure and Transport: "Signal That Overheating Has Passed"

Centum KCC Switzen, Haeundae-gu, Busan

[Asia Economy Reporter Moon Jiwon] The rate of increase in apartment prices in the Busan area has decreased for two consecutive weeks. Analysts suggest that the rapid surge in housing prices following the removal of Haeundae, Suyeong, and Dongnae districts from the adjustment target areas in November last year was only a short-lived trend. The Ministry of Land, Infrastructure and Transport explained that "this is a sign that the overheated state has passed."

According to the weekly apartment price trend data from the Korea Real Estate Board on the 3rd, as of December 30 last year, the apartment sale prices in Busan rose by 0.04% compared to the previous week. Although the upward trend continued, the increase was half of the previous week's 0.08%. This rate of increase is the lowest since the removal from the adjustment target areas on November 8 last year.

In the case of Haeundae-gu, prices rose by 0.13%, which is about half of the previous week's 0.26%. This contrasts with the sharp 0.71% surge recorded on November 18 last year. The Korea Real Estate Board analyzed, "In Haeundae-gu, prices increased mainly in preferred residential complexes such as U-dong, Jung-dong, and Jaesong-dong, but the rise narrowed due to fatigue from the rapid surge and the spread of a wait-and-see attitude."

In Busan's Suyeong-gu and Dongnae-gu, prices rose by 0.14% and 0.17%, respectively, maintaining the same rate of increase as the previous week. However, both areas showed signs of stabilization by maintaining the lowest rate of increase since being removed from the adjustment target areas.

Previously, the government designated Haeundae, Suyeong, and Dongnae districts as adjustment target areas in November 2016 after Busan's real estate prices showed a rapid increase. However, as the local economy declined and Busan apartment prices continued to fall, these areas were removed from the target list on November 8 last year, three years later.

Immediately after the removal, apartment prices in these areas surged in the short term. For example, the actual transaction price of a 157㎡ unit at Haeundae Doosan We've the Zenith in U-dong, Haeundae-gu, was around 1.18 billion KRW in October last year but rose to 1.3 billion KRW in December, increasing by more than 100 million KRW in two months.

Although some complexes still show strong prices, the local economy is sluggish, and with the government's December 16 real estate measures freezing the overall market sentiment, there are forecasts that maintaining the upward trend will be difficult. Lee Myungseop, head of the Housing Policy Division at the Ministry of Land, said, "The slowdown in the rate of price increase is a more important signal," adding, "The market will soon shift to a wait-and-see stance."

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