As the government pushes the transfer of the Ministry of Oceans and Fisheries to Busan, movements in the real estate market are emerging, such as an increase in apartment transactions in Busan. However, experts assessed that while demand may rise for the time being, it will be difficult to sustain in the long term, and they evaluated that the likelihood of resolving the unsold housing problem is not high.
According to the Ministry of Oceans and Fisheries, the real estate industry, and others on the 10th, the government plans to transfer the ministry to Dong-gu, Busan. The main building will transfer to the IM Building in Dong-gu, Busan, and the annex will transfer to the Hyupsung Tower. About 850 Ministry of Oceans and Fisheries officials will move, and considering families and employees of affiliated and related agencies, there is an analysis that thousands of people could flow in over the long term.
As Dong-gu was confirmed as the planned transfer site, apartment sales transactions in Dong-gu showed an uptrend. According to the Korea Real Estate Board (REB), the number of apartment sales in Dong-gu steadily increased from 42 in January this year and reached 70 in Jul., surpassing 70. Apartment transactions across Busan also increased. They rose from 1,751 in January this year to 3,194 in Jun., surpassing 3,000 for the first time in seven months since Oct. last year. After that, they increased to 3,344 in Jul.
Actual transaction prices of apartments near the planned transfer site also rose. The exclusive area 69 square meters unit at "Hyupsung Hu Fore Busanjin Station Ocean View," adjacent to the IM Building, transacted for 530 million won last month, up about 70 million won from the 460 million won transaction in Apr.
In the recent subscription market in the Busan area, new presale apartment subscriptions are also recording high competition rates. In the first-priority general subscription for "LEEL River Park Centum" in Jul., a total of 9,150 applications were received for 1,961 units, recording a competition rate of 4.67 to 1. "Summit Limited Namcheon" also received 16,286 applications for 720 first-priority units, recording an average competition rate of 22.62 to 1.
There are also reactions on the ground that inquiries have noticeably increased. A representative of A Real Estate Agency in Sujeong-dong, Dong-gu, Busan, said, "Some homeowners are raising prices or pulling listings after hearing news of the Ministry of Oceans and Fisheries transfer," and added, "While transactions have not directly increased, inquiries have risen perceptibly. In particular, rather than apartment-related inquiries, there used to be many vacant retail spaces near Busanjin Station, including Hyupsung Hu Fore Busanjin Station Ocean View, and now inquiries about retail spaces are coming in."
However, experts assessed that it will be difficult for demand for the area to continue in the long term. While there is some impact near the planned site, they expected little effect on the overall Busan market and projected continued difficulty in clearing the backlog of unsold homes in Busan. According to the Ministry of Land, Infrastructure and Transport's unsold housing status, as of the end of Jul. this year, there were 5,573 units, the fourth-highest among local governments nationwide after Gyeonggi (10,513 units), Daegu (8,977 units), and North Gyeongsang (6,292 units). In particular, unsold units after completion, considered malignant unsold inventory, totaled 2,567 units, up 89.9% from the same month a year earlier (1,352 units).
Seo Jin-hyung, a professor in the Department of Real Estate Law and Administration at Kwangwoon University, said, "When a public institution transfers to a non-capital region, nearby real estate can show an upward effect in the short term," adding, "However, this Ministry of Oceans and Fisheries transfer has a limited effect because the number of people moving is not large. It is not enough to resolve the unsold inventory accumulated in Busan."
Kim Hyo-seon, chief real estate advisor at NH Nonghyup Bank, said, "Because transportation in Busan is well developed, it may be limited for civil servants with a living base in the Seoul metropolitan area to relocate. There will not be a major impact on the market," and added, "However, if, starting with the Ministry of Oceans and Fisheries transfer, the number of cases of public institutions, state-owned enterprises, or private companies transferring increases, there will certainly be an impact, so the attempt to transfer the ministry itself is positive."