"MASGA Boosts Home Prices"...Will Ulsan's Housing Market Continue Its Upward Trend? [Real Estate AtoZ]

Cumulative Apartment Price Change in Ulsan Reaches 0.27%
Contrasts with Declining Home Prices in Other Metropolitan Cities
Shipbuilding Industry Boosts Optimism for Real Estate with MASGA Project

The 'MASGA (Make American Shipbuilding Great Again)' cap released by the Presidential Office. Photo by Yonhap News

Housing prices in Ulsan Metropolitan City are showing unusual strength. While most regional cities are experiencing a decline in home prices, Ulsan is the only one recording an upward trend. Despite facing the same negative factor of declining housing demand due to population outflow, home prices have continued to rise because there has been relatively little housing supply in recent years. In particular, there is growing speculation that the recent prospect of launching the 'MASGA (Make American Shipbuilding Great Again) Project,' which aims to strengthen shipbuilding cooperation between South Korea and the United States, could further solidify the upward trend in Ulsan's housing market.

According to the Korea Real Estate Board on August 30, as of August 25, the cumulative change in apartment sales prices in Ulsan this year was 0.27%. Unlike the same period last year, which saw a decrease of 0.38%, prices have risen this year.

This stands in contrast to other metropolitan cities, where housing prices are falling. During the same period, Daegu recorded a decline of 3.18%, the largest drop among metropolitan cities. Gwangju followed with a decrease of 1.83%, Daejeon with 1.74%, Busan with 1.43%, and Incheon with 1.02%. The cumulative change in apartment sales prices in regional areas outside the Seoul metropolitan area was a decrease of 1.26%.

This does not mean that Ulsan is experiencing an influx of people. As of June this year, Ulsan's total population was 1,122,221, a net outflow of 4,169 compared to the same period last year. However, the sharp reduction in new housing supply due to previous oversupply is believed to have affected home prices. The number of unsold new homes has also decreased. According to housing statistics from the Ministry of Land, Infrastructure and Transport, as of July, the number of unsold homes in Ulsan was 2,531, down 7.8% from the previous month. Compared to the end of last year, this is a decrease of 38.7%.

Even in Ulsan, record-high transactions have occurred in Shinjeong-dong, Nam-gu, which is considered a prime area. Last month, a 185-square-meter unit in Sinjeong Lotte Castle Kingdom was sold for 1.53 billion won, up 100 million won from the previous month's transaction of 1.43 billion won. This month, a 101-square-meter unit in Munsu-ro 2nd I-Park 2nd Complex was sold for 1.16 billion won, which is 60 million won higher than the previous month's price of 1.1 billion won.

The MASGA project, which is expected to begin with recent tariff negotiations with the United States, is also seen as a positive factor for the Ulsan real estate market. Ulsan is home to more than 580 shipbuilding companies, centered around HD Hyundai Heavy Industries. On August 25 (local time), U.S. President Donald Trump stated at the South Korea-U.S. summit that the United States would purchase Korean-made ships, raising expectations for increased orders in the future. Since the United States is considering the defense industry, including the warship market, HD Hyundai Heavy Industries, which excels in warship construction, is also expected to benefit.

However, some argue that in the long term, since the U.S. government aims to revive its domestic shipbuilding industry, there is a risk of decreased orders due to new shipyard construction and supply chain restructuring in the United States. If skilled technicians move to the United States to help revive American shipbuilding, this could also have a negative impact on the Ulsan real estate market.

Experts predict that with limited housing supply in Ulsan and the MASGA project likely to have a positive effect on the local economy, the upward trend in prices may continue for the time being. Kim Hyosun, Chief Real Estate Specialist at NH Nonghyup Bank, explained, "With no significant new housing supply and positive economic factors in the region, there is a possibility that the Ulsan real estate market could improve further. The fact that incomes are high, housing prices are low, and the market is mainly for actual residents is also a positive factor for rising sales prices."