As the real estate market in Busan remains stagnant, additional sales are expected in June, raising concerns about an increase in unsold properties. Mid-sized construction companies in the Busan region are also struggling due to worsening performance.
According to housing statistics from the Ministry of Land, Infrastructure and Transport as of April 4, the number of unsold dwellings in Busan stood at 4,709, an increase of 220 units (4.9%) compared to the previous month (4,489 units). In particular, the number of unsold units classified as "toxic unsold properties" reached 2,462, making it the fourth highest in the country, following Daegu, North Gyeongsang, and South Gyeongsang. This also marked the highest number since July 2010, when there were 2,885 units, the most in 14 years and 9 months.
From 2020 to 2024, Busan supplied an average of about 29,000 units annually, resulting in a large number of unsold properties. Recent sales have also faced difficulties. According to the Korea Real Estate Board's subscription home, among the 10 complexes supplied in Busan this year, only one complex, Hanwha Foreena Busan Deokcheon 3, completely filled its recruitment quota during the first and second rounds of subscription.
This month, the subscription for "Eco Delta City Chungheung S-Class Edu River" saw only 329 applications for the 674 units offered, resulting in a shortfall for some types, while the application for "Dongnae Ban-do Yebora" in March also fell short with 105 applications for 387 units.
Local construction companies are also facing difficulties due to the market stagnation. According to statistics from the Ministry of Land, Infrastructure and Transport's construction industry knowledge information system, as of April, there were a total of 922 general construction companies based in Busan, a decrease of 34 from the same period last year (956 companies).
The performance has also worsened. Dongwon Development, the top-ranked company in construction capability evaluation in Busan (ranked 31st), reported cumulative sales of 9.09 billion won in the first quarter, a 47.3% decrease compared to the same period last year (17.27 billion won). Operating profit also fell to 4.5 billion won, down 81.8% from the same period last year (24.7 billion won).
Concerns are growing that the scale of unsold dwellings will increase further, with additional supply planned. According to the real estate platform Zigbang, 4,552 units are expected to be supplied in Busan this month. According to the Ministry of Land, Infrastructure and Transport's housing statistics on sales performance, 2,303 units were sold in Busan in June last year. This is an increase of 2,249 units over one year. However, the expected supply this month is an estimated figure, and there is a possibility of delays in sales.
A representative from an A real estate agency in Dong-gu, Busan, noted, "Even complexes that were recently sold are considering discount sales and are struggling to resolve unsold properties," adding, "The market atmosphere is so quiet that there are hardly any inquiries."
Additionally, Busan includes several areas that are designated for the government's local urban renewal projects, indicating that there will be continuous supply in the future. According to the Ministry of Land, Infrastructure and Transport, local governments for 14 aging planned cities across the country, excluding the first generation new towns, are reported to be establishing maintenance basic plans. Among these, five areas in Busan are included: Haeundae, Hwamyung Geumgok, Manduk, Dadae, and Mora-dong.
Experts also predict that there will continue to be difficulties in resolving the supply issues for a while and emphasized the need for supply volume regulation. Kim Eun-sun, head of the data lab at Zigbang, stated, "If additional supply is implemented while existing unsold inventory is not fully absorbed, the burden may increase," adding, "Depending on the sale price, there may be a rush of subscription demand, but currently, rising construction costs create an environment where sale prices may not be low."
Kim Hyo-sun, chief real estate officer at NH Nonghyup Bank, pointed out, "Busan has more small-scale urban housing than large apartment complexes, making it relatively difficult for unsold properties to be absorbed over time," and noted, "Furthermore, population movement and aging are severe, making it difficult to prevent demand relocation. If additional supply is not controlled, the unsold property issue may become more serious."