Year of Publication



Martin School of Public Policy and Administration

Committee Chair

Dr. N. Petrovsky; Dr. J. S. Butler

Executive Summary

In recent years, the demographic structure of South Korea as been changing. Although the total population is still growing, the population growth rate is shrinking due to the rapid decline in the birth rate and the aging population. On the other hand, the growth rate of the total number of households is decreasing, but the rate of one-person or two-person households is steadily increasing. Data by region from 2003 to 2016 are used to analyze how these changes in the size and composition of population and households affect housing prices. Since the patterns of changes in the housing price and demographic structure by each metropolitan city or the province are different, consequently the regional analyses are implemented as well as the nationwide analysis.

According to the results of the analyses, population variables such as the population growth rate and the elderly dependency ratio have no statistically significant effect on the housing price, while household variables such as the household growth rate and the ratio of small households (1 or 2 people) to all households have a significant effect. In the nationwide analysis, both household factors are statistically significant, but in the regional analysis, only single or two-person household ratio shows meaningful results in the Seoul metropolitan region and the non-metropolitan provinces. Besides the population and household variables, only the growth rate of new housing licenses, which is a housing supply variable, has a significant impact on housing prices regardless of regions.

Therefore, in establishing a housing policy in the future, the government should pay more attention to the household variables than the population variables. Regionally, the small household ratio should be considered more in the Seoul metropolitan region and the non-metropolitan provinces. In addition, it should also examine thoroughly the economic variables such as housing supply.