On the afternoon of 5th during the Chuseok holiday, the LEEL River Park Centum model home in U-dong, Haeundae District, Busan, had its doors open as usual. In front of the main gate, there was a sign that said it would be operating as normal during the Chuseok holiday period. It went on sale in July, but a large number of units remained unsold. The interior of the model home was luxuriously appointed, befitting a large "high-end" complex, and several family visitors were in consultations. Outside was quiet, and a banner on the wall announced "highest competition rate 116.4 to 1." This was the competition rate for the standard 84㎡ exclusive-use type favored by the general public, and the average first-priority competition rate was 4.67 to 1.
LEEL River Park Centum, set to rise in Jaesong-dong, Haeundae District, Busan, was identified as a main culprit behind the sharp increase in unsold homes in Busan in Aug. According to the Ministry of Land, Infrastructure and Transport, the number of unsold homes in Busan in Aug. was 7,146, surpassing 7,000 for the first time ever. Compared with a month earlier (5,573), it surged by 1,573 (28.2%). That is because the complex is a large-scale development with 2,070 units, and the main offerings were large units with relatively high prices, the 125㎡ (51-pyeong) to 154㎡ (62-pyeong) exclusive-use types. These accounted for 1,380 units in total, with 696 and 684 units, respectively. The list prices started at about 2 billion won and 2.7 billion won, respectively. For the 154㎡ exclusive-use type, the list price for the top floors (63rd–66th) was close to 3.3 billion won.
A sales consultant on site said, "The 84㎡ exclusive-use type, priced around 1.2 billion–1.4 billion won, sold out early," and added, "There were many unsold units among the 60-pyeong range, which are higher priced. Now contracts are proceeding steadily, and the overall sales rate is around 73%."
The Centum area of Haeundae District in Busan is drawing attention as an "emerging wealthy neighborhood and school district." LEEL River Park Centum is a complex that can be zoned for "Centum Middle School," a top-tier school nationally, and has "Songsu Elementary School" a five-minute walk away. Songsu Elementary and Centum Middle are highly preferred by parents and are considered representative overcrowded schools in Busan. Located right next to the Suyeong River, all 154㎡ exclusive-use units can have a "river view." It is also a "station area" complex near Jaesong Station on the Donghae Line. Many say there is nothing to fault about its location.
Analysts say the unsold units at this complex reflect the structural slump in Busan's apartment market. Busan is experiencing oversupply amid ongoing population decline and economic downturn. Busan's population fell by 140,000 from 3.4 million in 2020 five years ago to 3.26 million last year. Notably, outflows of people in their 20s and 30s, the younger cohort, accounted for 63% of the total. With key commercial districts slumping, several big-box stores such as NC Department Store Seomyeon branch, Mega Mart Namcheon branch, and Lotte Mart Geumjeong branch have closed in recent years. Yet more than 30,000 apartment units are set to be occupied in Busan by 2030. Summit Limited Namcheon, to be supplied in Namcheon-dong, Suyeong District, Busan, also recorded a top competition rate of 349 to 1 in its Aug. sale, but some large units remained unsold.
Apartment prices in Busan have been falling continuously since the real estate boom in 2022. According to the Korea Real Estate Board (REB), Busan's apartment sales price index has been on a downward trend for 39 consecutive months, from May 2022 (121.2) through Aug. this year (99.2).
Lee Yeong-rae, head of Real Estate Survey, said, "The unsold complexes in Busan at this point set high list prices because the projects were prepared during the 2020–2022 home price surge," and added, "Since 2023, as home prices have fallen, the gap between list prices and the prices of nearby apartments has widened."
Busan City explained that this increase in unsold homes is a temporary phenomenon. In its official materials last month, it said, "The volume of unsold dwellings that temporarily increased in Jul.–Aug. will gradually decrease going forward." But a closer look at the seriously unsold market suggested it was hard to be entirely reassured. Seomyeon Gyeongnam Honorsville Eterocasa (80 units) in Buan-dong, Jin District, and Jungang Heights The Hill (185 units) in Sinpyeong-dong, Saha District, were tallied with "zero (0 units)" in sales volume.
On the same day, Seomyeon Gyeongnam Honorsville Eterocasa had a yellow banner on the front of the building announcing the "exercise of a lien." The new building, more than 20 stories high, had all entrances blocked, and no one was coming or going even at midday. Completed in Dec. last year, this apartment went on sale in Oct. 2022, but the results were poor, and the developer reportedly proceeded to cancel sales. As the real estate market worsened thereafter, the constructor (Dong-Ah Construction Industrial) failed to pay subcontractors their construction fees, ultimately leading to the exercise of a lien.
This apartment is a 15-minute walk from Seomyeon Station (Line 2). Busan Citizens Park is just across the street, and Emart Traders is right next door. With "Buam Elementary School" and "Busanjin Middle School" within walking distance and the Busanjin District Office nearby, the location is good, but it is a situation where neither purchasing through allocation nor buying is possible.
A representative of the sales agency said, "Right now, this is not a situation where you can receive an allocation. Assignment transactions are also difficult," and added, "You would have to inquire about a transaction through a licensed real estate office."
However, a representative of a licensed real estate office in Buam-dong said, "A subcontractor did not get paid and is exercising a lien; last year they said transactions would be resumed, but I have heard nothing," and added, "There are many inquiries because of the good location, but no transactions are being made."
In the case of Jungang Heights The Hill, a public auction is underway due to long-term unsold status. Four apartment buildings were completed in Dec. last year, and the complex's amenities were neatly in place, but it was hard to find people around. Only the management office behind the main gate of the complex had its lights on. This apartment went on sale in Jun. 2022, but with only six contracts signed, the developer canceled the contracts. It then remained unsold for over two years, and recently, even a plan to sell after completion fell through, reportedly leading to a public auction. Jungang Heights The Hill is a station-area complex near Sinpyeong Station on Line 1, with "Sinnam Elementary School" a three-minute walk away.
A representative of a licensed real estate office in Sinpyeong-dong said, "They tried to sell after completion but canceled it and attempted to sell the whole property, but I understand it did not go through."
Busan also recorded an all-time high for unsold units after completion (seriously unsold). As of Aug., the figure was 2,772 units, and the upward trend has continued since surpassing 2,000 units in Jan. Lee Yeong-rae said, "In Busan, when the number of unsold homes exceeds 5,000, it becomes a burden, and recently it has surpassed 7,000, which is concerning," and added, "Among small-scale complexes, there are many where almost no units have been sold."