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Seoul housing prices and the role of speculation

Xiao, Qin; Park, Donghyun


Donghyun Park


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.


Xiao, Q., & Park, D. (2010). Seoul housing prices and the role of speculation. Empirical economics, 38(3), 619-644.

Journal Article Type Article
Online Publication Date Mar 31, 2009
Publication Date 2010-06
Print ISSN 0377-7332
Electronic ISSN 1435-8921
Publisher Springer Verlag
Peer Reviewed Peer Reviewed
Volume 38
Issue 3
Pages 619-644
Keywords Speculative bubble; Latent information; Housing market
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