Ulsan Housing Price Increase Rate Tops Nationwide for 8 Consecutive Weeks, Defying Regulations

Jung-gu and Nam-gu Designated as Regulated Areas
Still the Highest Nationwide with a 0.38% Increase

Despite Sharp Drop in Non-Local Buyers,
Active Local Switching Demand Continues

[Asia Economy Reporter Lee Chun-hee] Ulsan has emerged as a hot place in the local real estate market at the beginning of the year. Since the new year, housing prices have shown a steep upward trend, consecutively recording the highest nationwide increase rate. Although the heat has somewhat cooled under the government's high-intensity regulations, it is still analyzed that a quiet upward trend continues.

According to the weekly apartment sales price index by the Korea Real Estate Board on the 15th, as of the 11th, Ulsan's housing price increase rate was 0.38%, the highest among the 17 cities and provinces nationwide. It has shown the highest increase rate for eight consecutive weeks since November 23 last year.

Ulsan's housing prices have shown a steep upward trend, rising 0.83% on November 30 last year. In October last year, the 84㎡ (exclusive area) unit in ‘Munsu-ro 2nd I-Park’ Complex 2 in Nam-gu was traded at 1.19 billion KRW, joining the ‘84㎡ 1 billion KRW club’ for the first time in Ulsan. Just a month earlier, the actual transaction price was formed in the mid-900 million KRW range.

Due to this price increase trend, Jung-gu and Nam-gu in Ulsan were designated as adjustment target areas on December 18 last year. However, even after that, housing prices in these areas have only reduced the rate of increase but have steadily continued to rise. In fact, in Nam-gu, which showed a weekly increase rate of over 1% before the designation of the regulated area, housing prices rose by 0.25% as of the 11th. In addition, housing price increases are seen throughout Ulsan, including ▲Buk-gu 0.49%, ▲Jung-gu 0.47%, ▲Dong-gu 0.41%, and ▲Ulju-gun 0.37%.

Initially, this price increase was attributed to circulating funds in the market avoiding the high-intensity regulations in the metropolitan area and engaging in remote investment. However, industry insiders explained that the recent housing price increase in Ulsan is entirely different. The representative of real estate agency A in Sinjeong-dong, Nam-gu said, "Until last summer, contacts from Seoul, Gyeonggi, and other metropolitan areas continued, but recently inquiries from outsiders have completely stopped," adding, "We see that the recent price increase is driven by demand within Ulsan."

In fact, looking at apartment transaction volumes by buyer residence from the Real Estate Board, purchases of Ulsan apartments by residents outside Ulsan sharply declined in the second half of last year. At the peak of ‘panic buying’ in June last year, the proportion of purchases by outsiders was 26.9% (715 cases) out of 2,661 total apartment transactions in Ulsan, but it plummeted to 12.4% in July. For the following four months from August to November, it remained at a low level around 15%.

A representative of real estate agency B in Boksan-dong, Jung-gu said, "Since the designation as an adjustment target area, actual transactions have not been active, so it seems that a quiet rise rather than a rapid increase is taking place," adding, "However, even within Ulsan, there is steady demand for switching homes, which is seen as causing continuous price increases."