Ulsan, the only metropolitan city in South Korea without a subway system, is set to undergo a significant transformation with the introduction of its first urban railway, a tram line. This development is expected to bring about considerable changes in the city's real estate market.
Ulsan's First Urban Railway Approved
The Metropolitan Area Rapid Transit Commission of the Ministry of Land, Infrastructure, and Transport recently approved the basic plan for the construction of the 'Ulsan Urban Railway Line 1 (Tram)'.
This new line will be an eco-friendly, non-wired hydrogen electric tram. This technology utilizes hydrogen fuel cells, eliminating the need for overhead power lines and minimizing greenhouse gas emissions. With a single 20-minute charge, the tram can travel up to 200km, making it a sustainable mode of transportation.
Ulsan Urban Railway Line 1 will span 10.9km from Taehwagang Station to Sinbok Intersection, with 15 new stations planned. The line will pass through major roads such as Samsan-ro, Munsun-ro, and Daehak-ro. The commission expects the tram to reduce average bus travel time by 30%, from 40 minutes to 28 minutes. The total project cost is estimated at 381.4 billion won, with the target completion date set for 2028.
The commission stated that the new tram line will "greatly contribute to improving travel convenience in the metropolitan area by ensuring rapid movement and punctuality, as well as providing transfer connections with the Donghae Line wide-area electric railway (with 2.5 million annual passengers)."
The commission also plans to actively cooperate to ensure that Ulsan Line 2 is promptly selected for a preliminary feasibility study. Kang Hee-up, Chairman of the Metropolitan Area Rapid Transit Commission, said, "We will actively support this project to ensure that Ulsan Urban Railway Line 1 opens on time in 2028. We will also support the expansion of other metropolitan transportation means such as roads, railways, and transfer facilities so that residents can use more convenient and safer metropolitan transportation services."
Positive Impact on the Real Estate Market Expected
The opening of Urban Railway Line 1 is expected to have a positive impact on Ulsan's real estate market, which has been experiencing a downturn with a record number of unsold apartments. As of the end of last year, Ulsan had 4,131 unsold housing units, a 40.5% increase from the previous year.
However, recent trends indicate a shift in the market. Ulsan's apartment sales prices have turned upward, recording the highest increase rate among non-metropolitan cities. According to a survey by real estate platform Zigbang, the proportion of declining transactions among apartment transactions in Ulsan in January this year was the lowest among metropolitan cities, indicating that more houses were sold at higher prices than existing transactions.
The decrease in the supply of apartments is also seen as a positive factor. According to Real Estate R114, the number of apartments scheduled for sale in Ulsan in the first quarter of 2025 is 1,216 units, a decrease from the same period last year. There are no apartments scheduled for move-in in the first quarter, further reducing the supply.
Experts believe that the improved transportation environment will be a boon for Ulsan's real estate market, especially in areas where tram stations will be located. Yang Ji-young, head of the Shinhan Financial Investment Center, said, "Since a tram line is being newly established in a metropolitan city that did not have a subway, expectations can be reflected."
However, the speed of implementation is a concern. The city of Ulsan needs to establish basic and detailed designs and project plans based on this basic plan approval. Yang said, "Since it is a project carried out by a local government, it can be delayed due to budget and other issues." She also added, "Unlike subways, trams have limitations in improving the transportation environment to nearby areas, which should also be considered."
In conclusion, the introduction of Ulsan's first urban railway is expected to bring about significant changes in the city's real estate market. The improved transportation environment, coupled with a decrease in the supply of apartments, is expected to have a positive impact on the market, especially in areas where tram stations will be located. However, the speed of implementation and the limitations of trams in improving transportation in surrounding areas should also be considered.
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