Seoul housing prices and the role of speculation

Xiao, Qin; Park, Donghyun

Abstract

Between June 1998 and March 2006, the price index of apartment houses in Seoul, Korea, more than doubled, while fundamentals such as GDP, wage, and population increased by less than 35%. This study examines the role of a rational speculative bubble in this price surge. We find that unobservable information explains part of the price volatility; and that a rational bubble proxy is a significant driver of prices. However, neither latent information nor rational bubble is enough to explain the recent housing price appreciation, even in conjunction with observable fundamentals. © Springer-Verlag 2009.

Citation

Xiao, Q., & Park, D. (2010). Seoul housing prices and the role of speculation. Empirical economics, 38(3), 619-644. https://doi.org/10.1007/s00181-009-0282-x

• Journal Article Type: Article
• Online Publication Date: Mar 31, 2009
• Publication Date: 2010-06
• Print ISSN: 0377-7332
• Publisher: Springer Verlag
• Peer Reviewed: Peer Reviewed
• Volume: 38
• Issue: 3
• Pages: 619-644
• DOI: https://doi.org/10.1007/s00181-009-0282-x
• Keywords: Speculative bubble; Latent information; Housing market
• Public URL: https://hull-repository.worktribe.com/output/424013
• Publisher URL: https://link.springer.com/article/10.1007%2Fs00181-009-0282-x