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Sustainability 2016, 8(5), 415; doi:10.3390/su8050415

Structural Changes in the Korean Housing Market before and after Macroeconomic Fluctuations

Department of Architectural Engineering, Hanynag University, 222,Wangsipri-ro, Sungdong-gu, Seoul 133-791, Korea
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Academic Editor: Vincenzo Torretta
Received: 8 March 2016 / Revised: 16 April 2016 / Accepted: 19 April 2016 / Published: 27 April 2016
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Abstract

The purpose of this paper is to identify structural changes in the Korean housing market for evaluating the sustainability of the Korean housing market and to derive important implications to seek housing business strategies and public policies. Two time periods were analyzed: April 2001–December 2007 and January 2008–December 2014 to identify the impact after the global financial crisis of 2008. The market was divided into transaction, chonsei, and monthly rent. The correlations were analyzed using a vector error correction model (VECM). A key result was that during the economic depression, demand for chonsei did not flow to the transaction market; this phenomenon affected the overall recovery of the housing market. The supply of chonsei today is rapidly decreasing with the depression in the transaction. Increases in chonsei prices are expected to continue along with the possibility that demand for chonsei will flow into the transaction or monthly rent market. Based on recent trends, the chonsei market, once main stream, will gradually weaken, and the Korean housing market will reorganize into transactions and monthly rent. This structural change may turn the Korean housing market into a target for long-term investments. View Full-Text
Keywords: Korean housing market; macroeconomics fluctuation; Fisher–Dipasquale–Wheaton model; vector error correction model Korean housing market; macroeconomics fluctuation; Fisher–Dipasquale–Wheaton model; vector error correction model
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Kim, S.; Kim, J.; Kim, J. Structural Changes in the Korean Housing Market before and after Macroeconomic Fluctuations. Sustainability 2016, 8, 415.

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