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Policy Briefs contain useful information on territorial planning policies and national strategies of Korea and other countries.
|TITLE||Behavioral analysis in the housing market and policy recommendations|
A behavioral analysis was conducted on the housing market based on the 2014 real estate market panel survey. In particular, this survey analyzed items that differentiated from other surveys.
A low percentage of households in the low income bracket said they were prepared for ‘jeonse’ (lump-sum housing rental deposit) hikes, and a high portion of these prepared households said they would resort to jeonse loans.
46.8 percent of the surveyed households responded they would consider buying a house if jeonse prices continue an upward trend, or if the jeonse to sale price ratio reaches 71.7 percent.
Some households who owned a house in areas where they did not live rented it out. 44.8 percent of them spent rental income to purchase or rent a house for residential use.
The highest percentage of the households planning to sell their home, or 65.6 percent said they would wait until a buyer shows up, followed by 28.1 percent who said they would cut prices and 6.3 percent who would give up the disposal.
❶ It is suggested to provide financial support and supply low-priced rental housing for the low income bracket in a bid to alleviate their housing cost burden.
❷ It is required to back those who are in the transition from rental to ownership and want to purchase a home for residential purpose.
❸ It is necessary to come up with measures to liquidate assets for low income households who own a home and to step up consumer protection over housing financing.
❹ A real estate market panel survey can be useful for conducting a variety of analysis including on supply and demand for the housing rental market and home sale market, factors for determining home sales and determinants for rental types.
Chungyu Park, head of real estate market research center at KRIHS, Minchul Kim, associate research fellow at KRIHS, Boram Bang, researcher at KRIHS
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