Real estate business cycle and real estate policies: the case of Korea

By using the rate of change in the price of land, the perception and analysis of determinants of the real estate business cycle, and the appraisal of past real estate policies have been proceeded. Korean real estate business cycle is asymmetric (i.e., the expansion and contraction period of which is 3 - 4 years and 8 - 9 years respectively). Effects of the determinants of real estate business cycles are dependent upon the phase of the cycle. Results of the regression, which explicity include the quantified real estate policies, indicate that past real estate policies were myopic and very much cycle-dependent. It is also highly probable that pre-emptive policies of fixed rules may stabilize real estate prices more effectively than the past myopic ones. This implies that, in addition to cycle-dependent short-term real estate policies, it might be more desirable to sustain cycle-independent long-term real estate policies. Reprinted by permission of EAAEDS: http://www.usc.es/economet/eaa.htm