{"title":"What causes house prices to fluctuate? Evidence from South Korea","authors":"Jinwoong Lee, Jihee Ann, Cheolbeom Park","doi":"10.1111/asej.12282","DOIUrl":null,"url":null,"abstract":"<p>In this study, we build a structural vector autoregressive model of the housing market with supply and demand shocks to determine the main causes of house price movements in South Korea. We include housing permits, basic housing demand, and the growth rates of real housing prices in the model. Changes in house prices are decomposed into three structural components: housing supply shocks, shocks to basic housing demand, and shocks to housing market-specific demand. We find that the main driver of the movements in house prices is housing market-specific demand shocks, and these are associated with beliefs regarding future house prices and the real estate market, as measured by the Consumer Sentiment Indices for the housing market, rather than credit conditions or financial variables such as interest rates or stock returns.</p>","PeriodicalId":45838,"journal":{"name":"Asian Economic Journal","volume":null,"pages":null},"PeriodicalIF":1.0000,"publicationDate":"2022-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Asian Economic Journal","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/asej.12282","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
In this study, we build a structural vector autoregressive model of the housing market with supply and demand shocks to determine the main causes of house price movements in South Korea. We include housing permits, basic housing demand, and the growth rates of real housing prices in the model. Changes in house prices are decomposed into three structural components: housing supply shocks, shocks to basic housing demand, and shocks to housing market-specific demand. We find that the main driver of the movements in house prices is housing market-specific demand shocks, and these are associated with beliefs regarding future house prices and the real estate market, as measured by the Consumer Sentiment Indices for the housing market, rather than credit conditions or financial variables such as interest rates or stock returns.
期刊介绍：
The Asian Economic Journal provides detailed coverage of a wide range of topics in economics relating to East Asia, including investigation of current research, international comparisons and country studies. It is a forum for debate amongst theorists, practitioners and researchers and publishes high-quality theoretical, empirical and policy orientated contributions. The Asian Economic Journal facilitates the exchange of information among researchers on a world-wide basis and offers a unique opportunity for economists to keep abreast of research on economics pertaining to East Asia.
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