Last month, the highest number of real estate sales and auctions occurred in Yeonsan-dong, Yeonje District, Busan. Among the legal districts nationwide, the most significant number of 170 cases had auction commencement decisions made or auction announcements registered. This is more than the quantity in Hwagok-dong, Gangseo District, Seoul, where many auctions are underway due to a massive rental fraud victimization. Additionally, over 90 cases of sales and auctions were reported in Yongho-dong and Daeyeon-dong of Nam-gu, and Oncheon-dong of Dongnae District. Four out of the five legal districts that had the most real estate sales and auctions nationwide, excluding Hwagok-dong, are located in Busan. It is analyzed that the long-term effects of population decline and real estate market stagnation are impacting the Busan region.
According to the court registration information on the 20th, the area with the most applications for auction commencement decisions and auction announcements in April was Yeonsan-dong, Yeonje District, Busan, where 170 cases were registered. Auctions involve the sale of properties seized under the National Tax Collection Act or items difficult to store under the Criminal Procedure Act by the Korea Asset Management Corporation (KAMCO), while sales are executed by the court under the Civil Execution Act. When an auction begins or an auction announcement is made, it is reflected in the registry and reported to the court. Last month, Yeonsan-dong had the most sales and auctions nationally.
Hwagok-dong, Gangseo District, Seoul, followed Yeonsan-dong with 152 cases of real estate sales and auctions. This area was the site of a rental fraud case involving landlords failing to return security deposits to tenants regarding 'beach houses'. Even after the fraudulent activities came to light in 2022, voluntary auctions are still continuing.
In Busan, a significant number of real estate sales and auctions were also observed in Yongho-dong (95 cases), Daeyeon-dong (94 cases), and Oncheon-dong (92 cases) in Nam-gu. Four out of the five legal districts with the most real estate sales and auctions nationwide were in Busan.
The high number of real estate sales and auctions in some legal districts of Busan is analyzed as a result of the city's deteriorating real estate market, impacting the non-apartment market, including officetels. In fact, one officetel in Yeonsan-dong, which had the highest number of auctions starting or announcements made in the country, had a total of 65 units auctioned simultaneously. This officetel near Mulmankgol Station on the Busan subway was auctioned off without fully occupied tenants. The auction was initiated after the Southern Busan Agricultural Cooperative failed to recover its debts.
Lee Yong-rae, head of Real Estate Survey, explained, 'Yeonsan-dong is densely populated with studios, multi-family and two-family dwellings, and officetels. Due to the economic downturn, many officetels that were not sold are being put up for auction.' Other areas such as Yongho-dong and Daeyeon-dong are primarily focusing on non-apartment centered real estate sales and auctions.
In the real estate market, it is stated that Busan is experiencing a serious population decline, leading to a chronic situation of unsold properties and prolonged stagnation in the real estate market. The population of Busan recorded 3,498,529 as of December 2016 (based on resident registration), marking the first drop below 3.5 million. In 2020, the number fell below 3.4 million, and by 2023, it decreased to 3.29 million, collapsing below the 3.3 million mark. As of last year, the proportion of the population aged 65 and over reached 23.0%, making it the first among the six metropolitan areas to enter a super-aged society (where the population aged 65 or older exceeds 20% of the total). The elderly population risk index, calculated by dividing the number of women aged 20-39 by the population over 65, was 0.49, the lowest among urban areas. A lower extinction risk index indicates a higher likelihood of the region disappearing.
A real estate industry official noted, 'It is difficult to find young people in Busan, and residential areas are increasingly focusing on the elderly. As the core demand for residential facilities, the young population continues to decrease, the risk of unsold properties is also growing.'
Lee Joo-hyun, a senior researcher at GGAuction, stated, 'The increase in sales and auctions reflects the stagnation in Busan's real estate market. Busan lacks factors to lead the market, resulting in stagnation not only in the housing market but also in commercial facilities.' Kim Eun-sun, head of the Big Data Lab at Zigbang, said, 'In Busan, the supply exceeds demand in a situation where demand is limited, leading to unresolved unsold properties, and the real estate market is unable to recover, continuing to see price declines.'