[비즈한국] Amid a stagnant local real estate market, Ulsan alone is charting a steep upward curve. In the first quarter of this year, the cumulative rise in Ulsan apartment sale prices reached 1.57%, placing it firmly in second place among the 17 major metropolitan governments nationwide, following Seoul (2.16%).
With Daegu prices falling by 0.34% and Gwangju and Daejeon slipping by 0.29% and 0.08%, respectively, Ulsan's exceptional strength cannot be called a mere coincidence; it is an inevitable outcome driven by a convergence of complex structural factors.
The Return of the Shipbuilding Industry, Shaking the Entire City Economy
To find the core driving force behind Ulsan's real estate strength, one must first look at the revival of the shipbuilding industry. In the mid-2010s, Ulsan's economy suffered harsh trials—bankruptcies of subcontractors and the loss of tens of thousands of jobs—amid a triple crisis of order droughts, low oil prices, and the aggressive rise of China. At that time, Ulsan's apartment market absorbed this structural shock and was pulled into a tunnel of long-term stagnation.
The current situation is completely different. As Korean shipbuilders demonstrate unparalleled competitiveness in high-value-added vessel types like LNG carriers, ultra-large container ships, and ammonia-powered eco-friendly ships, the Ulsan shipbuilding cluster, led by HD Hyundai Heavy Industries329180, is on an unprecedented winning streak.
Last year's operating profit for HD Hyundai Heavy Industries reached 2.0375 trillion won, an increase of nearly 200% from the previous year. This went beyond mere corporate performance improvement, as it directly led to wage increases and performance bonuses for tens of thousands of shipyard workers. This capital flowed into the local retail market, breathing hot life into the entire Ulsan economy.
Furthermore, as the benefits of the “MASGA (Make American Shipbuilding Great Again)” project, currently being pushed by both South Korea and the U.S., are expected to concentrate in Ulsan, the long-term expectations of market participants are solidifying. With participation in U.S. Navy ship maintenance and the expansion of energy infrastructure orders becoming tangible, Ulsan's shipbuilding industry is restructuring from a simple cycle-dependent model to one that meets the massive demands of security and energy.
Real economic indicators clearly support this. In the fourth quarter of last year, Ulsan’s Gross Regional Domestic Product (GRDP) growth rate was 2.2% year-on-year, ranking first among all metropolitan cities. During the same period, Daejeon recorded negative growth of -0.2%, while Busan, Daegu, and Gwangju all remained in the 0% range.
In the third quarter of last year, there was even an unusual situation where Ulsan's growth rate (3.8%) surpassed Seoul's (3.6%). As the economy revives, household income rises, which translates into housing purchasing power, creating a virtuous cycle where buying sentiment centered on actual demand supports the market.
The Paradox of Supply: Homes Disappearing During a Boom
The vitality in demand alone is not enough to explain the current speed of price increases. Structural constraints on the supply side are making the upward pressure even steeper. According to the real estate information provider Asil, the number of apartment move-ins in Ulsan was halved from 8,882 in 2023 to 4,215 last year, and is expected to drop further to 3,507 this year and 3,201 next year. Considering that the appropriate annual number of move-ins estimated by the industry for Ulsan's population is about 5,400, the current supply level is in a state of severe shortage, failing to reach even half of that amount.
Ironically, the roots of this supply shortage trace back to the previous shipbuilding industry recession. As the pre-sale market froze in the late 2010s, construction companies began avoiding new projects in Ulsan, and the resulting decline in licensing and construction starts has manifested as the current plummet in move-in volumes. Because construction projects require at least 3 to 5 years from planning and design to licensing, start, and completion, it is physically impossible to respond to the sudden surge in demand in the short term. To make matters worse, with the national surge in construction costs and the tightening of the Project Financing (PF) market, the passive attitude of construction companies toward new business remains unchanged.
The impact of the supply shortage is clearly visible in the temperature change of the pre-sale market. The competition rate for first-tier pre-sale applicants for private apartments in Ulsan soared nearly threefold in just one year, from an average of 1.91 to 1 in March last year to 4.96 to 1 in March this year. The number of unsold units also dropped by 63.2% in just one year, from 3,811 units in January last year to 1,402 in January this year, proving that the market's absorption capacity has strengthened accordingly.
The streak of new record-high prices continues. A dedicated 84㎡ unit at the Seyang Cheonggu Village Apartment in Samsan-dong, Nam-gu, Ulsan, was traded for 420 million won last month, setting a new record. Compared to a sale of 348 million won for the same size just three months ago in December last year, it rose by 72 million won in three months, an annualized rate of nearly 30%. The fact that the rise in Ulsan apartment prices has continued for 37 weeks since last July strongly suggests that this is not a temporary rebound, but a structural upward trend.
The Jeonse Market Is Also Rising: The Universality of Demand
The fact that *jeonse* (lump-sum deposit rental) prices are rising alongside apartment sale prices shows that the current demand in the Ulsan real estate market is broad-based and on a healthy foundation. By the end of last month, Ulsan's apartment *jeonse* prices had risen by 1.87% this year, ranking second in the nation after Sejong (1.92%).
Rising *jeonse* prices mean that the number of people who actually want to live in Ulsan is increasing, which aligns with the interpretation that the influx of migrant workers and new hires due to the shipbuilding boom is boosting residential demand. The rise in *jeonse* prices also affects the sales market; as the *jeonse*-to-purchase price ratio increases, the incentive to switch from renting to buying for actual use grows. The strength of *jeonse* demand acts as a floor, supporting purchase demand, and creating a structure where both markets reinforce each other.
Experts note that the current rise in Ulsan's real estate prices is led by actual demand, not speculative demand. Price increases based on actual demand are more resilient to external shocks and tend to maintain a relatively stable flow unless there are sudden variables. Given that wage increases for shipbuilding workers are directly leading to improved purchasing power, which acts as a practical driver for new pre-sale subscriptions or existing home purchases, it is clear that the current upward trend is not just a liquidity-driven rally or a result of mere expectations.
Of course, risk factors cannot be ignored. Decreases in ship orders due to global economic slowdowns, changes in U.S. trade policy, fluctuations in interest rates, and above all, the structural vulnerability of Ulsan's economy, which is heavily reliant on the shipbuilding industry, could serve as market variables at any time. If prices continue to rise, the burden on new, actual-demand buyers may increase, potentially weakening the demand base itself over time.
Nevertheless, considering that orders are secured for several years to come and that the supply shortage is likely to last for at least 3 to 5 years, the Ulsan real estate market is expected to maintain a clearly differentiated flow from other regional cities for the time being.
The case of Ulsan leaves us with a very fundamental lesson: real estate ultimately follows a city's economic vitality. In an era when concerns about the extinction of regional areas are rising, Ulsan is proving that it is not government subsidies or administrative special favors, but real industrial competitiveness and job creation that sustain a city, create housing demand, and uphold the real estate market.
※ Kim Hak-ryeol, head of the Smart Tube Real Estate Research Institute, known by his pen name "Pashong," previously served as a team leader at the Gallup Korea Real Estate Research Division. He operates the Naver blog "Pashong's World Exploration" and hosts the YouTube channel "StuTV." His books include "3040 Beginner's First Real Estate Investment (2026)," "Rewriting the Republic of Korea Real Estate User Manual (2025)," "The Power of Gyeonggi Real Estate (2024)," "The Absolute Principles of Seoul Real Estate (2023)," "The Future of Incheon Real Estate (2022)," "Kim Hak-ryeol's Absolute Principles of Real Estate Investment (2022)," "Future Map of Korea Real Estate (2021)," and "From Now On, Only Places That Will Rise, Rise (2020)."