Speaker
Description
South Korea has been experienced rapid increase in housing prices and residential instability due to job and industry concentration in the Seoul metropolitan region. The sharp rise in housing prices is one of the major factors that undermines residential stability and housing affordability. Many studies have highlighted the regional imbalance of jobs and industries as a key factor in the increase in housing prices in the metropolitan regions. It is therefore crucial to identify factors affecting housing prices including variables related to employment and industry location.
This study aims to uncover the factors influencing housing prices in the Seoul metropolitan region covering three areas: Seoul Metropolitan City, Incheon Metropolitan City and Gyeonggi-do Province in Korea, while focusing on the impact of regional specialized industries. Specialized industries are defined as those within a specific industry category with a location quotient exceeding 1.25, and the quotients of specialized industries are recalculated using the number of employees working for the specialized industries in the region(Lee and Lim, 2021). To understand the disparity in the industrial impact between the areas, this research compares differences in the effects of specialized industries on housing prices between the region in Seoul metropolitan area. This study further compares the effects of the location quotients by major industry categories.
In this study, spatial panel model is employed to compare the factors influencing housing prices among the areas and industries. Housing sale prices are set as the dependent variable, with the location quotients of specialized industries, as well as various indicators related to households, housing, transportation, education, culture, and the regional economy, set as independent variables. The panel data consists of annual data from 2011 to 2023, with the basic administrative districts within the Seoul metropolitan region. Separate panel data sets are prepared for the Seoul and other Seoul metropolitan regions.
The results indicate that housing prices significantly increase as the location quotients of specialized industries rise. Furthermore, the location quotients of specialized industries have a more positive effect in Seoul than Incheon and Gyeonggi-do. When standardized coefficients are compared, the impacts of the location quotients of specialized industries are less than the net migration rate, the number of households, housing stock, and per capita regional income. However, they are higher than those of other variables related to transportation, education, culture, and the regional economy. Comparing the impacts of specialized industries in Seoul, finance and insurance, professional, scientific and technical services, and construction are identified as having a strong positive effects on housing prices, while other areas, manufacturing, construction, and professional, scientific and technical services are identified as significant. Therefore, housing policies in metropolitan regions should be implemented considering regional industrial strategies, including the development of regional specialized industries.
References
Clapp, J.M. and Giaccotto, C. (1994) 'The influence of economic variables on local house price dynamics', Journal of Urban Economics, 36(2), pp. 161–183.
Case, K.E. and Mayer, C.J. (1996) 'Housing price dynamics within a metropolitan area', Regional Science and Urban Economics, 26(3–4), pp. 387–407.
Miller, N. and Peng, L. (2006) 'Exploring metropolitan housing price volatility', The Journal of Real Estate Finance and Economics, 33, pp. 5–18.
Glaeser, E.L. and Nathanson, C.G. (2017) 'An extrapolative model of house price dynamics', Journal of Financial Economics, 126(1), pp. 147–170.
Lee, Y.L. and Lim, B.I. (2021) 'An analysis on the impact of specialized industries in Seoul on the land price fluctuation - Considering 25 local districts in Seoul', Seoul Studies, 22(3), pp. 1–13.
| Keywords | Housing Price, Industry, Spatial Panel Model, Seoul Metropolitan Area |
|---|---|
| Best Congress Paper Award | Yes |
