As many redevelopment and reconstruction maintenance zones have been designated in Busan, each complex is accelerating its efforts to establish maintenance project associations. There are concerns that, along with the need for maintenance projects due to a large number of aging complexes, the recent increase in unsold apartments in the Busan area could lead to even more unsold properties.
According to the maintenance industry on the 14th, about 10 new maintenance zones in Busan were designated from June to earlier this month. Including the new maintenance zones, the total number of households in maintenance zones in Busan amounts to 15,000.
Some business sites have applied for the establishment of promotion committees just a month after the zoning designation or secured majority agreements, meeting the legal consent rate, thereby accelerating the projects. Most regions are pushing for founding general meetings within the year, and there is a prospect that a number of maintenance project associations will be established by the end of this year.
The district pushing for the most maintenance projects is Yeonje District in Busan. Currently, over 25 projects, including redevelopment and reconstruction, street housing, and small-scale reconstruction, are underway in this area, with five new maintenance zones added, such as Yeonsan 6, 11, 13, and 14 districts, and Geoje District 3. Yeonsan District 13 secured the consent rate from residents just about a month after being designated as a maintenance zone on June 11. Yeonje District is noted as one of the areas with a high concentration of aging single-family homes and villa villages.
Additionally, new maintenance zones have been designated and announced in places like Saha District and Nam District (2 zones), as well as Dong District and Geumjeong District (1 zone), where promotion committee approvals and collection of consent forms are in progress.
The industry noted that the aging of apartments in the Busan area makes maintenance projects inevitable, while also showing reactions indicating that there are considered projects despite a strengthened selective bidding policy. A representative from a large construction firm said, 'Busan is the business site we consider after Seoul and the metropolitan area,' adding, 'We need to evaluate project viability, but the maintenance projects in Busan have a certain level of demand, so we tend to review them positively.'
On the other hand, there are concerns that the accumulation of unsold properties in the Busan area could pose difficulties in selecting construction companies due to project viability issues. A representative from a large construction firm mentioned, 'With the accumulation of unsold properties in the provinces and prolonged stagnation in the construction industry, there is a passive attitude toward new business sites in the provinces,' stating, 'Unless the project sites are in areas like Haeundae or Suyeong Districts with confirmed project viability, selecting construction companies will not be easy.'
According to the Ministry of Land, Infrastructure and Transport, as of June, there are 5,375 unsold properties in the Busan area, which is a 3.3% increase compared to the same month last year (5,205 properties). This figure ranks fourth nationally, following Gyeonggi, Daegu, and North Gyeongsang. Notably, the 'malignant unsold properties' classified as completed but unsold have sharply risen to 2,663 units, a 89.9% increase compared to the same month last year (1,402 units).
Due to these unsold properties, some maintenance project sites have actually faced difficulties in selecting construction companies. In the Dongnae District of Busan, for example, Yeongjang 2 District held three bidding rounds for the selection of a construction company, but due to insufficient competition, the bids were unsuccessful, and eventually transitioned to a negotiated contract, leading to the selection of Doosan as the construction company last month.
Experts expressed concerns that polarization within the Busan area could deepen. Song Seung-hyun, the representative of Urban and Economy, stated, 'Some aging areas in Busan may see demand as long as the location is promising,' adding, 'However, conducting maintenance projects without assessing demand and project viability in an environment where unsold properties are accumulating poses significant risks and could negatively impact housing prices in Busan.'