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Busan's property market is showing signs of moderation with apartment prices averaging KRW 7.6 million per square meter as of September 2025. The market faces challenges from oversupply, declining transactions, and weak rental yields below 2%, creating a buyer's market with increased negotiating power for purchasers.
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Busan's property market is experiencing a buyer-favorable environment with modest price increases overshadowed by longer time on market and declining transaction volumes.
Analysts forecast flat to minor price declines over the next 12 months, with rental yields remaining below 2% and high inventory of unsold new-build apartments creating downward pressure on prices.
| Market Indicator | Current Status (Sep 2025) | Trend Direction |
|---|---|---|
| Average Apartment Price/sqm | KRW 7.6 million (USD 5,250) | Modest increase (+5% annually) |
| Rental Yield | Below 2% | Declining |
| Transaction Volume | Quarterly decline | Downward |
| Time on Market | 3-4 months | Increasing |
| New Build Inventory | High unsold units | Above national average |
| Price Forecast (12 months) | 0% to -2% | Flat to minor decline |
| Foreign Buyer Share | Declining except luxury | Stagnating |
What's the current average price per square meter for apartments in Busan, and how has it changed over the last 12 months?
The current average apartment price per square meter in Busan is approximately KRW 7.6 million (USD 5,250) as of September 2025.
Over the past 12 months, Busan apartment prices have increased by roughly 5% when adjusted for the inclusion of high-priced luxury developments. This modest growth primarily stems from new premium waterfront projects pushing up the overall average.
However, the market tells a more complex story beneath these headline figures. Most existing apartment complexes outside premium districts have experienced price stagnation or minor declines. The increase is largely attributable to newly completed luxury developments rather than broad-based market appreciation.
Compared to the 2022 peak, current prices remain below historical highs, and the past six months show a continuing trend toward price moderation in most neighborhoods. Only select waterfront luxury developments have maintained upward momentum.
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How many new housing units are being built in Busan this year compared to last year, and what percentage of them are apartments versus houses?
New housing construction in Busan has followed the national trend of modest increases in private apartment sales volumes this year.
The city's development pattern strongly favors high-rise apartment complexes over traditional houses, with more than 80% of new residential units being apartments. This shift reflects ongoing urban densification policies and market demand for modern amenities.
Rapid urban development has concentrated new construction in vertical housing solutions rather than single-family homes. Major developers have focused on large-scale apartment complexes to maximize land efficiency in this coastal city.
The construction pipeline continues to emphasize apartment developments, particularly in emerging districts and redevelopment zones. Traditional house construction represents less than 20% of total new residential units.
What's the current rental yield in Busan for residential properties, and how does it compare to Seoul and other major Korean cities?
The current rental yield for residential properties in Busan is below 2% for standard long-term rentals as of September 2025.
This yield significantly underperforms compared to Seoul's 2.2-2.4% rental yields and trails behind other major Korean cities like Daegu, which offers yields exceeding 2.5%. Busan's low yields reflect challenging conditions for property investors.
Only short-term vacation rentals in tourist-heavy areas show higher returns, but these require active management and face seasonal fluctuations. Traditional buy-to-let investments struggle to generate meaningful cash flow.
The yield compression stems from relatively high purchase prices combined with moderate rental rates, creating an unfavorable investment environment for income-focused buyers.
How many property transactions took place in Busan over the past quarter, and is that number trending up or down compared to the same period last year?
Property transactions in Busan over the past quarter are trending downward compared to the same period last year.
The declining transaction volumes reflect reduced speculative interest and a more cautious market sentiment among both buyers and sellers. Market participants are adopting a wait-and-see approach amid economic uncertainty.
Oversupply conditions in several districts have contributed to slower transaction activity, as buyers have more options and take longer to make purchasing decisions. The abundance of available properties has shifted negotiating power toward purchasers.
Reduced investor activity, both domestic and foreign, has further dampened transaction volumes as the market lacks the speculative demand that previously drove sales activity.
What's the average time on market for a property in Busan right now, and how has it shifted over the past six months?
The average time on market for properties in Busan has increased to approximately 3-4 months for standard units as of September 2025.
This represents a significant shift from the previous 2-3 month average just six months ago, indicating a clear softening in market conditions. Sellers are finding it increasingly difficult to achieve quick sales at their desired prices.
The extended marketing periods reflect excess inventory conditions and demand stagnation across most price segments. Properties outside premium locations experience even longer selling times.
This trend has forced many sellers to become more flexible on pricing and terms, contributing to the overall buyer's market conditions currently prevalent in Busan.
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How many unsold new-build apartments are currently on the market in Busan, and how does this figure compare to the national average?
Busan currently has a high level of unsold new-build apartments, particularly outside premium neighborhoods, exceeding the national average.
The inventory challenges have become pronounced in mid-tier and suburban developments where demand has not matched supply. Developers have responded with increased buyer incentives and greater price flexibility.
This oversupply situation has created downward pressure on both new-build and existing apartment prices, as buyers can choose from an abundance of available options. The competitive environment favors purchasers seeking better deals.
The excess inventory reflects optimistic development planning during previous market cycles that has not aligned with current demand patterns, creating a structural imbalance that may take time to correct.
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What is the forecasted GDP growth rate for Busan over the next two years, and how strongly does it correlate with property price trends?
The forecasted GDP growth rate for Busan over the next two years is under 2% annually, reflecting limited economic expansion in the region.
The correlation between Busan's GDP growth and property price trends is weak to moderate, as economic stagnation in non-tourism sectors contributes to the current property market softness. Unlike Seoul, Busan's economy lacks diverse high-growth industries that typically drive real estate demand.
The city's economic challenges stem from declining traditional industries and limited new business development outside the port and tourism sectors. This economic foundation provides insufficient momentum for robust property price appreciation.
While tourism and some service sectors show resilience, the overall economic outlook suggests continued pressure on property markets as job growth and income expansion remain constrained.
How are interest rates from major Korean banks affecting mortgage affordability in Busan, and what percentage of buyers are using fixed versus variable loans?
Major Korean banks have maintained relatively steady interest rates, but mortgage affordability remains challenging for new buyers in Busan despite modest price increases.
Approximately 70% of recent buyers opt for fixed-rate mortgages due to concerns about future rate uncertainty and broader economic instability. This preference for fixed rates reflects buyers' desire for payment predictability in an uncertain environment.
The steady interest rate environment has not translated into improved affordability due to tightened lending standards and required higher down payments for non-prime borrowers. Banks have become more selective in their lending criteria.
Variable-rate loans remain available but attract fewer borrowers who prefer the security of fixed payments, especially given the economic uncertainties affecting the region.
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What's the projected population growth or decline in Busan over the next five years, and how does migration from Seoul or other regions influence demand?
Busan's projected population growth over the next five years is flat to declining, presenting demographic headwinds for the property market.
Migration from Seoul and other central regions provides some counterbalancing demand, but this influx is insufficient to broadly lift market conditions. The migration patterns create pockets of demand in specific neighborhoods but don't drive citywide appreciation.
Young professionals seeking lower living costs compared to Seoul represent the primary migration demographic, but their numbers remain limited relative to the overall housing stock. This demographic typically seeks rental rather than ownership opportunities.
The population dynamics contribute to the current oversupply conditions, as housing development has outpaced actual demographic demand, creating structural imbalances in the market.
How many foreign buyers purchased property in Busan last year, and is their share of the market increasing or decreasing?
Foreign buyer property acquisitions in Busan have stagnated over the past year, with their overall market share declining slightly.
The exception remains select luxury districts where overseas investment continues to show strength, particularly from Chinese and Japanese buyers seeking coastal properties. These premium segments maintain foreign interest despite broader market challenges.
Overall foreign investment has been dampened by global economic uncertainties and more attractive opportunities in other Asian markets. Currency fluctuations and regulatory considerations have also influenced foreign buyer behavior.
The reduced foreign participation removes a significant source of demand that previously supported certain market segments, contributing to the current buyer's market conditions.
What's the current office and commercial property vacancy rate in Busan, and what does that suggest about the broader market outlook?
Current office and commercial property vacancy rates in Busan are rising, indicating cautious market sentiment and subdued business expansion.
The increasing vacancy rates reflect limited new business formation and companies downsizing their physical footprints. This trend suggests broader economic challenges that extend beyond residential real estate.
Rising commercial vacancy rates typically correlate with reduced employment opportunities and slower economic growth, which negatively impacts residential property demand. The commercial real estate weakness signals underlying economic softness.
These conditions suggest continued headwinds for the broader real estate market outlook, as commercial property performance often leads residential market trends by several quarters.
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What are analysts' median forecasts for Busan's property price growth or decline percentage over the next 12 months?
Median analyst forecasts for Busan property prices over the next 12 months suggest flat to minor declines ranging from 0% to -2%.
These projections reflect expectations of a continuing buyer's market with limited recovery prospects outside premium waterfront segments. Most analysts anticipate ongoing price pressure from oversupply conditions.
The forecast range accounts for potential variability between different neighborhoods and property types, with luxury developments potentially maintaining stability while mid-tier properties face greater downward pressure.
Analysts expect the market to require at least 12-18 months to absorb current inventory levels before any meaningful price recovery can begin, assuming no significant economic stimulus or policy changes.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Busan's property market presents a complex landscape for potential buyers and investors in late 2025.
While current conditions favor buyers with increased negotiating power and extended time on market, the fundamental challenges of weak rental yields, declining transaction volumes, and population stagnation suggest continued market softness ahead.