Effect of Former President Moon's Residence in Yangsan? ... Why Are Apartment Transactions by Outsiders Surging?

Outsiders' Apartment Sales Volume Ranks 2nd Nationwide in November
Investment Demand Shift to Busan and Ulsan Causes 'Balloon Effect'

Last year, transactions by non-locals increased in most areas where housing prices rose significantly. It is analyzed that when non-locals flocked to buy apartments to avoid regulations, local residents, stimulated by this, joined the buying spree, causing housing prices to soar throughout the year. The photo shows an apartment complex in Yangsan-si, Gyeongnam.

There has been a sustained surge in apartment investment by outsiders in the Yangsan area of Gyeongnam, where former President Moon Jae-in's retirement residence will be built, drawing attention to the background of this trend. Coincidentally, the upward trend has become more pronounced since the official announcement that President Moon's retirement home will be located in Pyeongsan Village, Habuk-myeon, leading to the term "retirement residence effect." However, it is generally assessed that this is not directly due to the retirement residence but rather a result of investment demand from Busan and Ulsan spilling over into adjacent areas.

According to the Korea Real Estate Board on the 29th, the number of apartment transactions by outsiders in Yangsan City reached 545 in December last year, ranking 4th among cities, counties, and districts nationwide. In the previous month, outsider transactions in this area were 559, the second highest in the country.

In the first half of last year, the number of apartment transactions by outsiders in Yangsan City remained at around 100 to 200 cases, but the situation changed from June. In June, transactions surged by 54% compared to the previous month, reaching 256 cases, and increased further to 310 cases in July. June was when news first broke that President Moon would reside in Pyeongsan Village, Jisan-ri, Habuk-myeon, Yangsan City after his retirement. From August to October, transaction volumes fell back to usual levels and stagnated, but surged again after November.

However, it is difficult to directly link outsider apartment purchases in Yangsan City to the retirement residence effect. A representative from a local real estate agency (A Real Estate Office) in the area said, "It is true that inquiries about apartment transactions by outsiders increased after June," but added, "It should be seen as investment demand that had been concentrated in Busan and Ulsan expanding to neighboring cities."

In fact, Gimhae City, which borders Busan and Yangsan, also shows a notable increase in transaction volume. In December last year, outsider apartment transactions in Gimhae City rose 25% month-on-month to 503 cases. Following 402 cases in November, ranking 6th overall, the volume continued to increase.

After the government designated most areas of Busan and Ulsan as regulated zones in December last year, there are expectations that demand in nearby areas such as Yangsan and Gimhae will increase further. Lim Byung-chul, chief researcher at Real Estate 114, said, "Yangsan and Gimhae had relatively undervalued housing prices due to active supply," adding, "As surrounding areas became regulated zones, a so-called balloon effect is occurring."

Meanwhile, in most regions where housing prices rose significantly last year, outsider transactions also increased. There were 17 cities nationwide where apartment prices rose more than 10%, and among them, 15 cities saw a higher proportion of outsider transactions compared to the previous year. It is analyzed that as outsiders flocked to buy apartments to avoid regulations, local residents, stimulated by this, joined the buying spree, causing housing prices to soar throughout the year.

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