Busan Property Investors Turn Their Eyes to Seoul in a Shift of Sentiment

A psychological shift is being detected among those who invested in Busan's core areas. Busan and Seoul apartment prices once moved similarly, which kept investors calm, but as Seoul apartment prices have risen far faster than Busan's recently, Busan investors have begun looking for answers.

Investors have now reached the stage of seriously considering moving their assets to Seoul rather than seeking solutions within Busan. This appears to be a phenomenon arising from the relative slump in Busan's property market combined with the strength of the Seoul market.

Tiger explained, "Until the point where the prices in Seoul and the prices in Busan were put side by side like this, my mind was fine, but now it doesn't just feel like this, it feels like it has completely become this, so I want to find an answer."

Busan's redevelopment properties are struggling to sell, which shows a gap between market expectations and investors' hopes. Even though redevelopment projects are underway, investors who put properties up for sale to trade up to Seoul are finding they cannot sell at the prices they want.

Tiger pointed out, "The project is moving forward, but the problem is I want to sell this to go to Seoul. But I can't sell it. People won't buy at that price. The prices people in the market are waiting for are lower than this." He said that the market is not accepting the prices sellers want.

Controversy over the valuation of a planned new apartment complex in Busan has raised calls for caution in investing. In particular, a complex called 'Gwangan D'Fine' carries such a negative reputation that, in Busan dialect, 'deu paida' (meaning 'even worse') is used to describe it.

Tiger suggested that the complex is perceived as overvalued in the market, saying, "There's one called Gwangan D'Fine. In Busan dialect, people say 'deu paida.' Even worse. Even worse. The word 'paida' means bad in Busan speech."

The judgment is that Busan has many areas where people can live on monthly or lease rents, so its investment value is not high.

Tiger said, "Sell everything and go where? To Seoul. To Seoul. Busan, from what I see now, has far too many areas where you can live mostly on monthly rent or lease. Where should you invest to reach the upper-tier areas you want in Busan? In the outskirts." He mentioned that funds for investing in upper-tier areas within Busan should be placed in the outskirts.

This reflects the perception that an investment strategy for moving from Busan to the desired upper-tier areas is not efficient compared with investing in Seoul.

In the past, steady buying demand pushed up prices in lower-tier areas, creating a springboard to move up to upper-tier areas, but Busan now lacks such explosive demand.

Tiger pointed out, "Busan doesn't see that happen anymore. Why? Buying demand has to follow and lift the prices of the areas below, but where is the place that doesn't see that kind of explosive demand? Busan, really." He stressed that the lack of demand is an obstacle to trading up within Busan.

One side offered the view that Busan is undervalued or that Seoul is extremely overvalued.

Hurang briefly said, "Either Busan is undervalued or Seoul is extreme," suggesting that the situation of the two markets can be interpreted in opposing ways.

An argument was made that investing in Seoul property has become more than brutally difficult and has now reached a stage where catching up is impossible. Just as a helium balloon floats far away once it slips from your grip, Seoul property prices have risen sharply, raising the entry barrier very high.

Tiger compared it, saying, "Seoul's difficulty isn't just brutal anymore, now you can't catch up. Like the helium balloons at a kids' amusement park. Once you let go, what happens? The balloon flies away. That's the level of difficulty it's reached." He stressed the impossibility of access to the Seoul market.

Those who bought sea-view units around 2019 for roughly 1.9 to 2 billion won now want to sell for around 3.5 to 3.6 billion won six or seven years later, but actually selling is not easy.

Tiger said, "People who bought LCT around 2019 bought sea-view units for about 1.9 to 2 billion won. Six or seven years have passed, so they want to sell for around 3.5 to 3.6 billion won. But will they sell? They won't sell." He revealed the gap between the expectations of LCT investors and reality.

He explains that because he analyzes a wider market and takes in more data when looking at Busan's property market, he can arrive at a diagnosis that differs from others.

This implies that the essence of Busan's current property market is hard to grasp from fragmentary information or a view confined to the local area. Tiger stressed that his perspective reflects a broader market situation.

Tiger said, "This is the world I see. Because I look broadly and look at a lot, my commentary on the world I see is different." He thus articulated the difference in his analytical approach.

Busan National University once boasted entrance scores rivaling top Seoul universities, but it now ranks far behind and is no longer even a point of comparison.

Tiger said, "When I was in school, Busan National had higher scores than Soongsil, Konkuk, and Hongik, and was on par with Chung-Ang. Now it's behind on every score and there's no comparison," suggesting that the fall in regional universities' standing is closely tied to population outflow from the region.

Tiger said, "Over there it's about 200 million won, so if it were me, I'd go to Sanggye. I'd go to Sanggye New Town," offering a concrete alternative and recommending a shift in investment direction.

The grounds offered are that apartment prices in key Seoul areas are comparable to, or even rising above, the flagship apartments in Busan's Marine City.

Tiger said, "You have to invest in Seoul now. Do you know what's really scary about Seoul? The flagship apartments being sold in Heukseok-dong are more expensive than or similar to the flagship-tier ones in Marine City," emphasizing Seoul's investment appeal.

This suggests it could also have a negative effect on the future value of Busan's property market.

Tiger stressed, "Where is the pace at which young people are disappearing felt all over the body? Busan's market. So you need to quickly find a way to shift and protect your money," stressing the need to act quickly to protect assets.

Apart from some redevelopment zones such as Uam 3-district, Chokjin 3-district, and Biny, and a few complexes like Namcheon Xi, they are assessed as having almost no future promise.

Tiger asserted, "Apart from these three, Uam 3-district, Chokjin 3-district, and Biny, and a few complexes like Namcheon Xi nearby, there's no future hope at all, and that's why people say don't buy since there's no future value, right?" referring to the limited investment options.

It has emerged that even Busan's high-net-worth asset holders are seriously considering moving their assets to Seoul. Owners of Busan's flagship high-priced apartments, such as Haeundae LCT, Marine City, I'Park, and Zenith, are asking whether it is wise to sell and relocate to Seoul.

This phenomenon is occurring as the perception spreads that Busan property will no longer rise. Even asset holders running businesses with well-known names are considering a move to Seoul.

Tiger said, "Lots of people ask me whether they should sell things like LCT, Marine City, I'Park, or Zenith and go to Seoul now. Why? Because they aren't rising. Even people who own businesses with household names are really coming," describing the change in sentiment among Busan's wealthy asset holders.