Record High March in Busan Housing Market, COVID-19 Impact Was Rapid and Severe

February Busan Housing Sales Volume Down 12%...Contrasting Nationwide 14% Increase Trend
"Post Deregulation Fatigue and COVID-19 Added to Short-Term Rise"

[Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] The Busan real estate market, which showed signs of overheating after the lifting of the adjustment target area designation, appears to have cooled down due to the spread of the novel coronavirus infection (COVID-19) and other factors.

According to the Ministry of Land, Infrastructure and Transport on the 22nd, the number of housing sales transactions in Busan in February was 6,560. This is a 12.0% decrease compared to 7,531 transactions in the previous month. Considering that the nationwide housing sales transactions during the same period increased by 13.7% to 115,264, this presents a contrasting picture. The metropolitan area also saw an increase in transactions by 20.0% to 66,456 compared to the previous month.

Busan apartment sale prices also fell for two consecutive weeks for the first time this year. According to the weekly apartment price trends by the Korea Real Estate Board, Busan's apartment sale prices in the third week of this month decreased by 0.02% for two consecutive weeks following the previous week. This is also in contrast to the nationwide apartment sale prices, which saw an expanded increase during the same period. In the metropolitan area (0.28%→0.29%), the rate of increase expanded, Seoul (0.02%→0.00%) turned stable, and the provinces (0.05%→0.05%) maintained last week's rate of increase.

Looking at each autonomous district, except for Gangseo-gu (0.01%), which slightly rose due to demand from Myeongji International New City and industrial complex back-up demand, all other areas were stable or declined. The Korea Real Estate Board explained, "Due to the postponement of purchases caused by COVID-19, short-term rise fatigue, and decreased demand for aging complexes, Haeundae-gu (-0.07%) declined mainly in older complexes such as Banyeo and Bansong-dong, while Dongnae (0.00%) and Geumjeong-gu (0.00%) turned stable."

It is analyzed that the Busan housing market, which showed short-term overheating after the lifting of the adjustment target area designation, has started price adjustments, and the COVID-19 situation has further dampened buyer sentiment. Previously, in November last year, apartment prices in Busan's "Hae·Su·Dong" (Haeundae-gu, Suyeong-gu, Dongnae-gu) rose for 16 consecutive weeks due to the effect of lifting the adjustment target area designation.

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