Abstract
In Korea, the increase in individuals incomes appears to lead to the bigger accumulation of housing assets than in other developed countries. And the accumulation is more concentrated in Seoul, especially in South Seoul. This study analyzes the development process of excess returns of apartment prices in Seoul and South Seoul compared to the national housing price based on the threshold regression model and the ESTAR model. The analysis result shows that excess returns in Seoul and South Seoul increase non-linearly as national income increases. This implies that apartment growth rates in Seoul and South Seoul continue to rise more than in other regions as the economy develops. In this case, the economic wealth will be concentrated in the Seoul area. In addition, if national income enters a high-growth regime with the appreciation of the won, housing investment will be strengthened in the Seoul area. This result implies that the dynamic accumulation of excess returns with a spillover effect from Seoul is the cause of housing instability of non-homeowners and imbalanced regional development.
Published Version
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