A Study on Office Market Prediction: Using Simultaneous Equation Model

Abstract

This study is to predict the office market using the simultaneous equation of office sales price and rent. The variables are office sales price, rental price, vacancy rate, industrial production index, corporate bond yield rate, and the number of unemployed in Seoul, and the office sales price model and rental price model were established using these variables. The spatial scope is Seoul, and the temporal scope is from the first quarter of 2001 to the first quarter of 2021. As a result of the office sales price model, it was found that a 1% increase in the office rental price would increase the office sales price by 0.922%, and a 1% increase in the industrial production index would increase the office sales price by 1.686%. As a result of the the office rental price model, office rental price increases by 0.325% when the office sales price increases by 1%, and office rental price increases by 0.531% when the vacancy rate increases by 1%. It is judged that the vacancy rate has a positive (+) effect on rental price because there are similar trends in office rental price and vacancy rate, and the vacancy rate has risen due to low growth, and the rental price has risen due to the rise in real estate prices. As a result of the simulation, it was found that the prediction result of the simultaneous equation model predicted the actual office sales price and rent well.