This study first evaluates the usefulness of the “housing supply ratio” which has been used as the single most important policy indicator in Korea. It is shown that the indicator suffers from conceptual defects as well as inaccuracy of basic data used to calculate the figure. Alternative indicators need to be employed for the formulation and evaluation of future housing policy.
Secondly, the Mankiw-Weil(1989) model was applied to analyze the trends in housing demand and relative price of housing in Korea. As was the case in the U.S. study, the decline of birth rates in Korea is expected to decelerate the growth of housing demand and hence exercise a down-ward pressure on housing prices. However, unlike in the American case, residential land prices are a key determinan of housing prices in Korea. This makes the long-term forecasting of relatie housing prices difficult.
Thirdly, a Mills(1986) model of optimal housing investment was adapted to analyze the Korean data. It was found that the recent surge of housing investment was not sufficient in reversing the trend of under-investment in housing. This raises an important question as to the sustainable and optimal level of housing investment. Although it cannot be specified as a fixed percentage of GNP, a casual analysis of international data suggests that 6% is a realistic maximum in the intermediate term.
Finally, international data on home ownership were analyzed with the hope of shedding some light on determining the future direction of government policy affecting housing tenure choice. It was found that there is no adequate conceptual model explaining the differences in the level of home ownership across ountries. This is not surprising because home ownership is heavily affected by various government policies which are hard to quantify. Whether or not Korean government should target at a certain level of home ownership is a political question. However, development of a well-functioning rental housing sector will be crucial to improving the housing conditions of the nation.
- 주택수요구조 변화전망에 관한 연구(A study on housing demand and housing investment in Korea)
- 고철; 김경환
주택수요구조 변화전망에 관한 연구(A study on housing demand and housing investment in Korea)
경기도 : 국토개발연구원
|Series Title; No||국토연 / 97-51|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Territorial Development < General|