Positive Developments and Regulatory Spillover Boost Non-Local Home Purchases in Ulsan [Real Estate AtoZ]

Number of Non-Local Buyers in Ulsan Homes Surges Nearly 50%
Busan Also Sees 31.7% Increase Amid "Arctic Shipping Route" Boom

Apartments in the Haeundae-gu and Suyeong-gu areas of Busan. Photo by Yonhap News

Amid a severe downturn in the regional real estate market, the number of non-local buyers purchasing homes in Ulsan has surged. This appears to be driven by investment demand resulting from both a shortage in housing supply and the positive outlook surrounding the United States' "MASGA (Make American Shipbuilding Great Again)" project, which aims to strengthen shipbuilding cooperation between Korea and the U.S. There are even projections that Ulsan could benefit as regulatory measures have been concentrated in the Seoul metropolitan area since October 15.

According to the Court Registration Information Plaza on the 28th, the number of non-local buyers who purchased collective buildings (such as officetels, apartments, multiplex housing, and multi-family housing) in Ulsan last month was tallied at 245. This represents a 49.4% increase compared to 164 in the previous month. It is also an 18.9% rise from 206 at the beginning of the year.

As apartment prices in Ulsan have been trending upward, non-local purchases have increased. Data from the Korea Real Estate Board show that, as of the 20th of this month, the cumulative apartment sales price change rate in Ulsan for the year is 0.75%. This contrasts sharply with the regional rate of -1.30%. Even compared to Gyeonggi Province, a metropolitan area, which recorded a cumulative rate of 0.37%, Ulsan's increase is higher.

Recently, Ulsan has been receiving more attention due to the MASGA project. There is strong anticipation that the region's economy, concentrated with shipbuilding companies, will be revitalized by the project. HD Hyundai Heavy Industries and HD Hyundai Mipo Dockyard, both with production bases in Ulsan, have even decided to merge in order to respond proactively to MASGA.

A decline in housing supply is also having an impact. The number of new housing units scheduled for occupancy in Ulsan by 2028 is projected to be between 3,800 and 4,700 per year, which falls short of the appropriate demand level of 6,000 units.

Meanwhile, Busan, which is benefiting from positive developments such as the relocation of the Ministry of Oceans and Fisheries and shipping companies, as well as the development of the Arctic shipping route, is also attracting attention from non-local buyers. Last month, 856 non-local buyers purchased homes in Busan, a 31.7% increase from the previous month. As of the 13th of this month, apartment prices in Busan rose by 0.03%, breaking a downward trend that had lasted for three years and four months. Major high-end areas such as Haeundae-gu, Suyeong-gu, and Dongnae-gu responded first with upward movement.

In contrast, cities like Sejong are seeing a decrease in non-local interest. During the last presidential election, the relocation of the Presidential Office and other positive factors led to increased transaction volume and price growth. The number of non-local buyers who purchased collective buildings in Sejong reached 495 in May, but as policy momentum waned, this figure plummeted by 66.5% to 166 last month.

Experts explain that as the government recently designated land transaction permit zones (LTPZ) mainly in the metropolitan area, regional cities with positive outlooks could enjoy secondary benefits. Kwon Youngsun, Team Leader at Shinhan Bank's Real Estate Investment Advisory Center, stated, "Even among regional cities, major metropolitan cities have a certain level of demand and an industrial base, so there is potential for further growth. There is also a perception that regional real estate prices are at a low point and, since they are free from regulations, demand may arise from those considering them as investment destinations."