1. ‥ 1 ‥
Economics for Korean Economy
Stage 8
Real Estate Market

2. ‥ 2 ‥
(조선일보, 2010.07.08.목)
Despite the rapid economic growth
Who possess a house before 45

3. ‥ 3 ‥
How long save annual income? How long will it take after marriage?

4. ‥ 4 ‥
(조선일보, 2010.07.09.금)
House refugee
Living at
House for national exam.
vinyl greenhouse
Small one room
inn
Pc room
Coffee shop

5. ‥ 5 ‥
Definition
 Real estate: land and anything on it
 Fundamental difference
Land
Natural resources : fixed
Specific land supply: flexible
by reclassification of land
Building: flexible in the long run.
 Finance is global, but real estate is local
Fixedness cause all problem of real estate.

6. ‥ 6 ‥
Housing Sector in Korean Economy
 National Wealth Statistics (2008)
Land 3,264.6 trillion won
Building for resident 779.4 trillion won
Building for nonresident 841.3 trillion won
 Total Value of Houses (end of 2007)
Total the declared value 공시가 : 1,665 t. won
Apartment 공동주택 1,343 t. won 747만호
detached house 342 t. won 418만호
2007 GDP : Flow 901 t. won
 Housing Investment over GDP
1970-2007 avg. 5.3%,
2003~2007: 4.9%

7. ‥ 7 ‥
 Impact of house value on Labor market
 The Higher the house value, the lower the mobility of labor
 (England, Boston etc.)
 Relation of real estae market on financial mkt.
Securitization
U.S. subprime mortgages problem & global crisis

8. ‥ 8 ‥
Global financial crisis from U.S.
 Credit extension & house price bubble
Rapid increase of mortgage loan
Mediation of the qualification for loan, especially sub-
prime creditor
 Securitization of subprime mortgage
Over-issue of Unclear derivative
Invest on mortgage security with short term money.
 U.S. House price fall after June 2006
 insolvent of subprime loan
Stop mortgage related security transaction
Global capital market stringency
자료: Acharya and Richardson (2009)

9. ‥ 9 ‥
Ratio of balance of house-backed loan over GDP
Countries 1994 2000 2006
Australia 33.2 55.5 82.2
Belgium 21.2 26.6 36.3
Denmark 64.9 76.1 100.8
Germany 44.1 54.1 51.3
Greece 3.6 9.2 29.3
Spain 15.8 30.9 58.6
France 20.8 21.5 32.2
Ireland 22.8 31.6 70.1
Italy 6.0 10.0 18.7
Japan 34.4 36.6 36.1
Korea 11.0 13.0 35.7
Luxembourg 24.4 25.8 34.3
Netherlands 46.4 74.2 111.9
Portugal 15.6 43.9 59.2
Finland 36.2 30.7 43.8
Sweden 54.8 45.7 56.7
UK 54.6 56.3 83.1
US 46.4 52.1 77.2

10. ‥ 10 ‥
 Source of inequality of Korean
Education and Real Estate
 Just before Revolt
A woman suaside because the house she sold
increase rapidly
Cannot overcome the scur of the losss due to her
mistake on the wrong decision.
Only her fault?

11. ‥ 11 ‥
Recent trend of home values in Korea
출처 : 중앙일보 (2010년4월27일)

12. ‥ 12 ‥
public sentiments
 Home value is too high in Korea.
 It increase too rapidly.
Due to scarce usable land.
 Real demander sacrificed by speculators.
Korean really have preference on speculation.
 The wealthy become richer due to the increase
of home value.

13. ‥ 13 ‥
On March 12, 2007, at Song-do,
7,000 people lined up for subscription to a studio apartment (The
Plau) by Koron co. for 2 day at cold weather below zero
temperatures and the was 2.5Km, because they can get 100 m.
won(1억원) premium if registered.

14. ‥ 14 ‥
Questions about the policy on real estate
To make it cheap, the government should intervene the
market?
Do we need any institution related to the public concept
of land ownership?
Will Increasing of the property holding taxes contribute
the stable of house and land prices?
Should we stress the role of public for the development
of real estate and supply of house?
Should we open the cost of sale price of new
apartment?
Restrain the re-constructing of apartment?

15. ‥ 15 ‥
Table of Contend
1. Characteristics of real estate market
2. Reason of high price of real estate
1) Narrow territory?
2) Unbalance of land owership?
3) Speculators?
3. If not, then why?
4. Real estate tax, proper or not?

16. ‥ 16 ‥
Chapter I.
Characteristics of
Real Estate Market
16

17. ‥ 17 ‥
Real Estate Market
 very unstable
Sale price of home at Seoul
For 10 years
From 30.8 to -15

18. ‥ 18 ‥
 Why unstable?
 because of the inelasticity of supply of real estate
Why Inelastic?
 It takes time to build building.
 Difficult to increase supply

19. ‥ 19 ‥
Instability of Real Estate Market
industrial products
출처: 알짬시장경제

20. ‥ 20 ‥
Q0
P0
P2
P1
중기 공급
장기 공급
수요 증가
수요
주택수
평당임대료
(또는 매매가)
Q0
P0
P2
P1
중기 공급
장기 공급
수요 증가
수요
주택수
평당임대료
(또는 매매가)
Inelastic supply of housing
Long-run Supply
short-run Supply
Demand
Demand Increase
Sales Price /
rent
No. of House

21. ‥ 21 ‥
Q0
P0
P2
P1
중기 공급
장기 공급
수요 증가
수요
주택수
평당임대료
(또는 매매가)
Q0
P0
P2
P1
중기 공급
장기 공급
수요 증가
수요
주택수
평당임대료
(또는 매매가)
elastic supply of housing
Long-run Supply
short-run Supply
Demand
Demand Increase
Sales Price /
rent
No. of House

22. ‥ 22 ‥
Because of this character
 Government intervention inevitable?
 Already publicity concept applied on land
Even though private land ownership,
Government regulated the purpose of land 지목, floor
space index 용적률, the building-to-land ratio 건폐율
 Land is not public goods
2 characteristics of Public goods
Uncompetitiveness
Unexclusiveness

23. ‥ 23 ‥
Q0
P0
P2
P1
초기 공급 정책 후 공급
수요 증가
수요
주택수
평당임대료
(또는 매매가)
P3
정책 후 증가
Q0
P0
P2
P1
초기 공급 정책 후 공급
수요 증가
수요
주택수
평당임대료
(또는 매매가)
P3
정책 후 증가
Repeat of Price increase &
govt. intervention
Increase
after policy
Supply
Demand
first
Increase
Sales Price /
rent
Increase
after policy

24. ‥ 24 ‥
Chapter II.
Why so expensive?

25. ‥ 25 ‥
Common view
 Expensive because of
1. scarce usable land?
2. Concentration ownership?
3. Speculators?

26. ‥ 26 ‥
1.
scarce usable land?

27. ‥ 27 ‥
 Population density (2003)
Land size 99,461 km2,
population 4,764만명,
density 481/km2
3rd in the world after Bangladesh & Taiwan
 Land size per person
half of Japan
1/8 of U.K.

28. ‥ 28 ‥
Population
densities of
48
metropolitan
areas
Scource: Bertaud

29. ‥ 29 ‥
 Natural constraints
¾ of land are mountains and inland waters
 Supply constraints by regulations
limited development district =5.4% of total land
There are 315 regulations related to land
Made through 112 laws
By 13 department of government.

30. ‥ 30 ‥
2 1 %
6 5 %
2 %1 %3 %3 %
5 %
지목별 토지면적비율 (2003)
농경지 산림지 대지 공장용지 공공용지(학교,도로,철도) 하천 기타
Too much
farmland
Share by Purpose of land
(2003)

31. ‥ 31 ‥27
4.6Etc.
2.8River & watercourse
2.8public site(school, road, railroad)
0.6Plootage for Factory
2.4Plottage for Building
65.3foreistry
21.5farmland
sharePurpose
(2002년 현재)
100.0 (300억평)Total
Share by Purpose of land (2002)

32. ‥ 32 ‥
 Urban Area
= plottage for building,
factory & public site
 Scarce?
No!
Urban area can be increased
By reclassification of land

33. ‥ 33 ‥
Is land supply curve vertical?

34. ‥ 34 ‥
 Not all land is the same commodity.
Forest, Farmland, lot for residency,
lot of commercials buildings
 Procedures
If peoples gathered some areas,
the sites for resident become scarce and
Government reallocate some farmland for resident, &
Reallocate some lots for resident to commercials,
Then the supply of these land increased.

35. ‥ 35 ‥
 Real estate: land and anything on it
 Fundamental difference
Land
Natural resources : fixed
Specific land supply: flexible
 by reclassification of land
Building: more flexible in the long run.

36. ‥ 36 ‥
 By the development of construction technolodge
1960s 5 story
1970s 12
1990s 30
2010s 50

37. ‥ 37 ‥
bird-eye view of Apt. in
Apkujungdong Current &
after reconstruction

38. ‥ 38 ‥
a birds-eye-view of Yongsan International
Business District

39. ‥ 39 ‥
2. Concentration ownership?
Distortion of statistics on
Inequality of land distribution

40. ‥ 40 ‥
 Report on July 14, 2005
About land ownership
concentration
It made people anxious.
Share of upper 5% of large
land holder was 65.2% on
1986.
It increased to 82.7% on
2005.

41. ‥ 41 ‥
 Is it true?
 What is wrong?

42. ‥ 42 ‥
Problem of this statistics
 1% of total population.
 Not of total household.
My family are also included in non-land-holder.
It is not wrong, but meaningless.
Calculated with household, not population
82.7% of land is owned not by upper 5%,
But by upper 14%
Among the upper 1% of land holder,
There is no chief of Jaebol.
Most are the owner of forests and farmland.

43. ‥ 43 ‥
 In 45 days, another
report on land
ownership
concentration on Aug.
29, 2005.
 What is different?
 Still problems.
 What?

44. ‥ 44 ‥
 Meaning statistics on concentration should
include the price of each land.
Statistics by size treat cheap forests and expensive
urban land.

45. ‥ 45 ‥
If prices are considered, land distribution of
Korea is the farest among 60 countries.
Land Gini Coefficient of each country

46. ‥ 46 ‥
 Korea is relatively equivalent society.
World Bank – East Asia Miracle (1993)
 Reason
a status system is abolished during Japanese colonial
period.
Land reform after liberalization
Shareholding system dissolved.
6.25 Korean War destroyed everything.

47. ‥ 47 ‥
3. Speculators?

48. ‥ 48 ‥
House Price to Income Ratio Trend
자료: 국민은행, 주택금융수요실태조사, 각년도

49. ‥ 49 ‥
U.K.
 This graph shows the ratio of house prices to Income for first time buyers,
source Nationwide data.

50. ‥ 50 ‥
How long will it take after marriage?
자료: 국민은행, 주택금융수요실태조사, 각년도

51. ‥ 51 ‥
Average Age of House Owner
by Income quintile1)
(단위: 세)
Lowest
1 quintile
Middle (2~4 quintile)
Highest
5 quintile
Avg.2 3 4
quintile
Owned
Houseless
55.9 46.3
39.9
47.9 45.7 45.4
40.2 39.6 39.9
46.2
40.0
48.2
41.2
46.5
Average 46.9 43.1
43.0 42.7
43.5
44.6 44.1
주 주: 1) 2007~2009년 분기 평균 기준, 가구주 기준
2) 도시가구 기준
자료 : 통계청「가계동향조사」원시자료

52. ‥ 52 ‥
Average Age of House Owner by Income quintile

53. ‥ 53 ‥
Country Comparison of HWI
자료: Housing Statistics in the EU (2010)/ 국토해양부/ 통계청/환경부/한국은행
주: 세부 지표의 괄호 안 수치는 2008년도 지표 값

54. ‥ 54 ‥
House Price & Rent Trend
주 : 1) 음영은 경기하강기

55. ‥ 55 ‥
Increasing Rate
Of Purchasing & Rent Price
(Yearly Avg. growth rate, %)
80s 90s 1990~2010
2000s 2007 2008 2009 2010
Purchasing
Price
9.8 0.6 5.2 9.0 4.0 0.2 2.4 2.9
Jeonse 15.0 3.8 4.9 5.1 2.9 0.2 6.4 4.4
Monthly 4.5 4.7 0.8 0.9 1.7 1.3 1.4 2.6
Note: 1980s : 1987~89, 1990s : 1990~99, 2000s : 2000~09
Source: 국민은행「주택가격조사」, 통계청「소비자물가조사」

56. ‥ 56 ‥

57. ‥ 57 ‥
Increasing Rate Of Purchasing & Rent Price
by Region
(Yearly Avg. growth rate, %)
80s1) 90s1)
2000s1) 2007 2008 2009 2010
Purchase Price 9.8 0.6 5.2 9.0 4.0 0.2 2.4
Seoul Metro
Other
-
-
-
-
7.8 16.0
1.0
6.8
1.1
0.1 0.6
0.92) 0.5 3.9
Jeonse Price 15.0 3.8 4.9 5.1 2.9 0.2 6.4
Seoul Metro
Other
-
-
-
-
5.7 8.0
2.0
3.8
2.3
-0.2 6.6
1.12) 0.9 4.8
Monthly rent 4.5 4.7 0.8 0.9 1.7 1.3 1.4
Seoul Metro3)
Other 3)
-
-
4.44)
4.34)
0.9 1.2
0.4
2.3
0.8
1.9
0.5
1.8
0.70.5
주주 : 1) 1980년대 : 1987~89년, 1990년대 : 1990~99년, 2000년대 : 2000~09년
2) 2004~09년 (2004년부터 통계 작성)
3) 수도권은 서울, 인천, 경기지역의 가구수를, 지방은 각 광역자치단체의 가구수를 기준으로 가중평균
4) 1991~99년
자 료 : 국민은행「주택가격조사」, 통계청「소비자물가조사」및「인구주택총조사」

58. ‥ 58 ‥
Trend of Purchasing Price by Region
음영은 경기 하강기

59. ‥ 59 ‥
음영은 경기 하강기
Trend of Jeonse Price & monthly rent
by Region

60. ‥ 60 ‥
Increasing Rate Of Purchasing & Rent Price
by Size
(Yearly Avg. growth rate, %)
80s1) 90s1)
2000s1) 2007 2008 2009 2010
Purchasing Price 9.8 0.6 5.2 9.0 4.0 0.2 2.4
Large
Middle
Small
6.9
9.6
11.5
0.4
0.6
0.8
4.0
4.6
7.0
8.4
10.3
1.0
2.6
6.8
-2.1
-0.4
0.5
2.6
6.1 1.7 3.1
Jeonse Price 15.0 3.8 4.9 5.1 2.9 0.2 6.4
Large
Middle
Small
13.5
14.4
17.1
2.1
3.3
4.2
3.7
5.1
3.6
4.9
5.7
1.3
2.2
4.2
-1.5
0.1
5.4
7.6
5.3 1.5 6.3
주 주: 1) 1980s : 1987~89, 1990s : 1990~99, 2000s : 2000~09
자료 : 국민은행「주택가격조사」

61. ‥ 61 ‥
Classification Criteria
Class
Large
아파트 및 연립주택(전용면적 95.9㎡ 이상),
단독주택(건물면적 162.0㎡ 이상 또는 대지면적 327.3㎡ 이상)
Middle
아파트 및 연립주택(전용면적 62.8㎡ 이상~95.9㎡미만),
단독주택(건물면적 95.9㎡ 이상~162.0㎡ 미만 또는 대지면적
228.1㎡ 이상~327.3㎡ 미만)
Small
아파트 및 연립주택(전용면적 62.8㎡ 미만),
단독주택(건물면적 95.9㎡ 미만 그리고 대지면적 228.1㎡ 미만)

62. ‥ 62 ‥
Trend of Purchasing Price by Size
음영은 경기 하강기

63. ‥ 63 ‥
Trend of Jeonse Price by Size
음영은 경기 하강기

64. ‥ 64 ‥
Jeonse Prices Increasing rate Trend
통계표명 : 주택전세가격 동향 단위 : %
2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 2011
02월 03월 04월 05월 06월 07월 08월 09월 10월 11월 12월 01월 02월 03월 04월
전국 0.6 0.7 0.6 0.4 0.4 0.3 0.4 0.6 0.8 1 0.7 0.9 1.6 1.7 1.2
수도권 0.5 0.7 0.6 0.3 0.2 0.1 0.3 0.7 1 1 0.6 0.8 1.7 1.8 0.9
서울 0.7 0.8 0.5 0.2 0.2 0.1 0.3 0.7 0.9 0.8 0.6 1 1.7 1.4 0.6
강남 0.9 0.7 0.5 0.3 0.3 0.1 0.4 0.8 1 1.1 0.8 1.1 1.7 1.3 0.7
강북 0.6 0.9 0.6 0.2 0.1 0 0.2 0.6 0.8 0.6 0.4 0.9 1.7 1.6 0.6
출처 : 국토해양부
「전국주택가격동
향조사」
주택전세가격 증감
률

65. ‥ 65 ‥
Jeonse Prices Increasing rate Trend
0
1
2
3
4
5
6
7
8
9
02월 03월 04월 05월 06월 07월 08월 09월 10월 11월 12월 01월 02월 03월 04월
2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 2011
강북
강남
서울
수도권
전국

66. ‥ 66 ‥
Jeonse Deposit ratio over home value
 Close to 60% of home value
 highest last 6.5 years
국민일보, 2011.05.05한국경제 2011-05-05

67. ‥ 67 ‥
Why renters suffered from high price?
1. Because of Jeonse system?
2. Because of multi-holder?

68. ‥ 68 ‥
 Lease a house on deposit basis
 Unique in the world
 Found at the middle of Josun dynasty
At Seoul, granary was rented by a deposit system.
 1910, Japanese Colonial government reported
It is the most general house rent system in Josun
At the report on the survey of Josun Custom (慣習調査
報告書)
1. Jeonse 傳貰

69. ‥ 69 ‥
 Foreigners are surprise at
Return all the deposit money
 Possible only when
1. Home value increases, &
2. Interest rate is high.
 Is it continued?
Will change to Monthly rent system.
Renters prefer to the deposit system.

70. ‥ 70 ‥
 Understanding the rent system on deposit
basis.
Ratio of the deposit vs. home value.
52-60%

71. ‥ 71 ‥
 Why owner prefer the system?
Expectation on the increase of home value.
 So
Owner take advantage when home value increase
more than cost,
Otherwise, renter get benefits.
 Key
Relative price increase

72. ‥ 72 ‥
How much increase?
 If house prices increase more
than 3.5%, then the owner can
get benefit.
 Cost
 Tax, interest, (opportunity cost),
maintenance cost,
 Reported by the Korea Research
Institute for Human Settlements (국
토연구원), a non-profit think tank.
(Chosun Daily, 2011.3.10. ]

73. ‥ 73 ‥
Does it increase always?
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
전도시매매지수
전도시매매/물가

74. ‥ 74 ‥
 Risk sharing & the deposit system
Inevitable business cycle & risk
Risk come from the fluctuations
Which is more desirable in the sense of taking the
risk?
The richer
Deposit rent system.
Owner, the richer, hold the risk

75. ‥ 75 ‥
2. Because of multi-house owner?
 No!
 because
If it prohibited, the supply of houses decreased.

76. ‥ 76 ‥

77. ‥ 77 ‥
plottage of Alfa Dorm, core facility of Pangyo, Kuyngido,
Size: 137,500㎡, need 5 t. won to built it, but negligent
because of shortage of fund. [Korea LH co.]
Still Vacant in Core Area at Panyo &
Dongtan

78. ‥ 78 ‥
 No. of Houses multiplex housing
multiplex
housing

79. ‥ 79 ‥
House Ownership (2006)
Total None
one
house
two
houses
Over 3 houses
Sum 3주택 4주택 5주택
6주택
이상
세 대
House
-hold
16,410
(100.0)
6,800
(41.5)
7,290
(44.4)
1,761
(10.7)
559
(3.4)
371
(2.3)
97
(0.6)
33
(0.2)
58
(0.3)
No. of
house
13,270
(100.0)
-
( - )
7,290
(55.0)
3,520
(26.5)
2,460
(18.5)
1,185
(8.9)
420
(3.2)
179
(1.3)
676
(5.1)
천세대, 천호, %
세대는 종합부동산세법상 기준 (종부세는 6억 이상 주택에 대해서 부과)
자료: 기획재정부

80. ‥ 80 ‥
Year 2005
Household
종부세 기준이 아니므로 전체
주택수가 더 많다.

81. ‥ 81 ‥
Year 2005,
Apartment holder
(exclude detached house)

82. ‥ 82 ‥
% of No. of Houses by category
Year Total1) Owned Etc.3)
Rent Jeonse Monthly2)
1980
1985
1990
1995
2000
2005
100.0 ( 797)
100.0 ( 957)
100.0 (1,135)
100.0 (1,296)
100.0 (1,431)
100.0 (1,589)
58.6
53.6
49.9
39.3
42.8
46.9
23.9
23.0
27.8
15.5
19.8
19.1
2.0
3.7
3.1
2.5
2.8
3.1
53.3
54.2
55.6
44.1
43.0
41.3
29.7
28.2
22.4
14.5
14.8
19.0
주 주: 1) ( )내는 전체 가구수(만가구)
2) 보증부 월세, 무보증 월세, 사글세
3) 무상 및 미상 등
자료 : 통계청「인구주택총조사」

83. ‥ 83 ‥
% of Rent
(%)
1970 1980 1990 2004
Korea - 39.3 46.9 41.3 1)
U. S.A. 35.8 34.4 36.1 31.0
일 본 - 40.0 39.0 39.5
독 일 63.9 60.7 61.9 51.4
영 국 50.0 42.0 35.0 30.0
네덜란드 - 58.0 55.0 44.6
18개국2) 평균 49.9 39.3 36.3 34.3
주: 1) 2005년 기준
2) 위 국가(한국 제외) 및 프랑스 호주 오스트리아 벨기에 캐나다 덴마크 핀란드 아일랜드 이탈리아 뉴
질랜드 노르웨이 스페인 스웨덴
자료 : 통계청「인구주택총조사」, Gstach(2007)에서 재인용

84. ‥ 84 ‥
2020 Seoul announced
Housing comprehensive plan
 2011.06.08
 City Government of Seoul will supply 720,000 houses until 2020
 Including 200,000 Public rent housing
 42% will be small size under 50㎡.
destruction

85. ‥ 85 ‥
Dispute on half price apartment
 Is it possible if government supply the houses?
‘Nest house’보금자리주택 by LH co.
5th, May. 18, 2011. 4 places
2011.05.18

86. ‥ 86 ‥
Sale Price changed a lot by the
neighbor prices
[중앙일보] 2011.05.
 정부는 분양가를 주변 시세의 80~85%로 정하기로 하고 관련법 개정안을
국회에 냈다.

87. ‥ 87 ‥
No more nest,‘보금자리’
자료출처 : 국민일보 2011년 5월 26일

88. ‥ 88 ‥
 Home value = construction cost + land cost
Little variations between urban and rural areas.
But land cost differ a lot.
Therefore government cannot cheap house without
any supply of cheap land.

89. ‥ 89 ‥
Land cost
Home value
Cost per
3.3m2 (만원)
Const. cost
Location
Rural area metro N. Seoul S. Seoul
250
500
1000
2000
3000
100

90. ‥ 90 ‥
 Differences of home value is determined by
Land prices
Which is dependent on how many people want it.
Not by government
Of course, government can give impact with regulations.

91. ‥ 91 ‥
Source: Ken Jones and Jim Simmons 'Location,
Location, Location' 2nd ed. Nelson Canada 1993
Location, Location, Location
Moses

92. ‥ 92 ‥
Mean Apartment Price by quintile
 Seoul apartment is far more expensive!
Because of its location.
http://land.kbstar.com/quics?asfilecode=5023&_nextPage=page=B011886

93. ‥ 93 ‥
 Case of Housing.
http://land.kbstar.com/quics?asfilecode=5023&_nextPage=page=B011886

94. ‥ 94 ‥
Why?
 Several reasons
One of them is education environment.
Housing price increase
5,500 won(per 3.3㎡당)
With one more higher point of the college entrance exam
Reported by Korea Institute of Public Finance(조세연구원) on
2011.4. 26

95. ‥ 95 ‥
Can government supply all new houses?
 It is impossible.
 Debt of LH public corporation
Interest burden
10b won(100억 원)
per day.

96. ‥ 96 ‥
조선일보, 2010.07.27]

97. ‥ 97 ‥
LH가 지난해 7월 착공한 경기도 성남시 중동3재개발구역. 주택시장 침체 등으로 분양
가를 확정하지 못해 착공 1년이 지나도록 아직 일반분양하지 못하고 있다. [LH 제공]

98. ‥ 98 ‥
How many houses to built
 Supplied by
private at
Seoul
metropolitan
area.

99. ‥ 99 ‥
 If government control the allocation
Too big
Sigapore possible
Posibility of moral hazard
Communist society
 In the long run, private ownership is not
different from longterm lending.
China, Vietnam, Israel
Also very expensive.

100. ‥ 100 ‥
To stabilize the rent market
 Jeonse supply decrease
Owners prefer to month payment
Low interest
Decreasing home value
Rapid Aging of society
 The old want monthly income.
 Jeonse demand increase
Renters with money Wait more
drop of home value.

101. ‥ 101 ‥
 Jeonse
 Monthly Payment
with security
deposit
 Pure Monthly
payment rent
Source: 국민은행 부동산통계

102. ‥ 102 ‥
Rent housing market
 policy
Supply public rent housing
Supply private rent housing
Multi housing holder is supplier
Most rent market is dominated by private Junsae suppliers

103. ‥ 103 ‥
"다주택자에 대한 시각 달리해야"
 권도엽
 New Minster of Land, Transport &
Maritime Affairs
2011.06. 01
▲ 권도엽 신임 국토부장관
연합뉴스

104. ‥ 104 ‥
3.
Then why it increased?

105. ‥ 105 ‥
 So expensive not because of
1. scarce usable land?
2. Concentration ownership?
3. Speculators?
 But because?
 Demand > supply

106. ‥ 106 ‥
서울 및 강남 아파트 명목, 실질가격
200.00
700.00
1200.00
1700.00
2200.00
2700.00
3200.00 88-11
89-11
90-11
91-11
92-11
93-11
94-11
95-11
96-11
97-11
98-11
99-11
00-11
01-11
02-11
03-11
04-11
05-11
06-11
07-11
서울 평당가 서울 실질가격
강남 평당가 강남 실질가격
Real Housing Price (1988-2007)
1st Boom
2nd. Boom
Foreign
Currency Crisis

107. ‥ 107 ‥
 Two Real Estate Boom in Korea
1st. Boom: 1988-1990
after the long economic boom in 1980s.
2nd. Boom: 1998-2006
After the long depression in housing price in 1990s, &
By the overshooting after IMF foreign crisis.
Long stagnation in real estate price between the two
booms.

108. ‥ 108 ‥
1st. Boom: 1988-1990
 Demand side
1. rapid economic growth.
1) Rapid increasing of Income
2) the high rate of increase in population
2. Rapid Urbanization
 Concentration to Seoul Metropolitan Area
3. Tendency to nuclear family
4. Baby Boom Generation buy a house
5. Myth to the Housing Price
6. Mortgaged loan custom
 Supply Side
Inelastic supply

109. ‥ 109 ‥
Evaluation of Urbanization
 Two Faces of Urban
Pros
Engine of Economic Activity: 86% of GDP was produced at urban area
in U.S.
 Low income countries only 55%
Cons
Pollution, a traffic congestion, poverty, crime

110. ‥ 110 ‥
 Why people lives in urban area?
 Why firms are there in expensive city?
 agglomeration economies
Producer benefit:
Easy to get worker, cost down
Regional economies:
 productivity increase with more same business
 Share manpower pool, knowledge spillover
Urbanization economies:
 Productivity increase whith more population in the city
Consumer benefit:
Various goods and services, & cultural activities

111. ‥ 111 ‥
 Global urbanization
Since 1960, the urbanization of developing countires
dominated the global urbanization.
In 2009, global urbanization was over 50%.
Difference
Developed countries avg. : 75%,
Underdeveloped : 45%
Regional Difference
Africa: 39%, Asia: 42%, Latin & South America: 79%,
Europe: 72%, N. America: 82%

112. ‥ 112 ‥
Steps of Urbanization: S shape curve
시간
도시화율
0
20
40
60
80
100
선진국
완료단계이행단계초기단계
개발도상국
저개발국s
농촌인구의 도시 진입
인구학적 변동
농촌 사회 도시 사회
도시화

113. ‥ 113 ‥
Economic Development & Urbanization
Source: UN 2009

114. ‥ 114 ‥
Urbanization & Per capita Income
Source: Buckley and Annez 2008
(1996 US$)

115. ‥ 115 ‥
90.590.1
88.3
86.7
81.9
74.3
66.7
50.9
43.1
33.9
28.3
24.4
18.4
14.5
0
10
20
30
40
50
60
70
80
90
100
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2007
도시화율
Urbanization of Korea
 Rapid urbanization in1960-70s
 After 1990s, stabilized.

116. ‥ 116 ‥
Industrial structure 1963-2007
Farming Mining S.O.C
& Fishery & Manu- Manufac-
turing
& etc.
facturing Service
1963 63.0 8.7 7.9 28.3
1970 50.4 14.3 13.2 35.3
1980 34.0 22.5 21.6 43.5
1990 17.9 27.6 27.2 54.5
2000 10.6 20.4 20.3 69.0
2007 7.4 17.7 17.6 75.0

117. ‥ 117 ‥
Is the world flat or spiky?
 Thomas Friedman
Information and Communications tech.
Globalization & urbanization
 Frances Cairncross
The Death of Distance
Substitution of
Personal contact &
Information and Communications tech?

118. ‥ 118 ‥
The World is Spiky: Population
Map by Tim Gulden, University of Maryland.
From Richard Florida, ‚The World is Spiky,‛
The Atlantic Monthly, October 2005
Richard Florida

119. ‥ 119 ‥
Seoul Subway Number of Lines : 14개
Number of Stations : 436개
System Length : 755Km
Daily Ridership : 8million

120. ‥ 120 ‥

121. ‥ 121 ‥

122. ‥ 122 ‥
World City
Ranking
Ranking City 인구순위 GDP순위
1 New York 6 2
2 London 28 5
3 Tokyo 1 1
4 Paris 20 6
5 Hong Kong 31 14
6 Chicago 25 4
7 Los Angeles 12 3
8 Singapore 38 23
9 Sydney 43 24
10 Seoul 22 19
11 Brussels 54 48
12 San Francisco 46 16
13 Washington 42 10
14 Toronto 36 20
15 Beijing 13 33
16 Berlin 48 46
17 Madrid 34 22
18 Vienna 55 40
19 Boston 41 11
20 Frankfurt 64 20
20 Shanghai 7 21
자료: Foreign Policy 2010

123. ‥ 123 ‥
Social Cost of Urban Concentration
 Social Cost
Pollution, a traffic congestion, crime
 Does the social cost due to the population?
Not by the congestion
But by the energy consumption, transportation
pattern, behavior of production or consumption

124. ‥ 124 ‥
Urban Policy
 Proper size of City
Depend on benefit and Cost
Dynamic concept
 이호철, ‚서울은 만원이다‛ 1968 , 서울 인구=370만
 Is metropolitan area too big?
The bigger the size, the more negative external
diseconomy?
Then the quality of life in Seoul when the population was 5
million, is better than now?
 How to solve the city concentration?
Control the size? or
Solve the external diseconomy.

125. ‥ 125 ‥
2. Why long stagnation in the 1990s?
 Key factors of the long stability in 1990s.
 5 New Towns
 2 million housing construction
 Housing supply increased rapidly in 1990s.
In the year 1965 – diffusion ratio was 81%.
Beginning of the 1980s, inhibitive policy of supple
 year 1987 it decreased to 69.2%.
In the early 1990s, accomplished the goal of constructing 2
million houses.
In year 2002, the Diffusion Ratio of housing reached 100%.

126. ‥ 126 ‥
주택보급률
 Diffusion
Ratio of
Houses
by Year

127. ‥ 127 ‥
Solved by Increasing the Supply
전체주택건설 실적
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
82년 83년 84년 85년 86년 87년 88년 89년 90년 91년 92년 93년 94년 95년 96년 97년 98년 99년 00년 01년 02년 03년

128. ‥ 128 ‥
 side effect of the urgent construction
a shoddy and fault construction
Rapid increasing of wages of unskilled laborers
Rapid increasing of wages of manufacturing workers
Lose of competitiveness
Chronic Trade deficit
Cost push inflation due to the rising of wage &
material cost
The demand of real estate increased and
the real estate price increased.

129. ‥ 129 ‥
3. The 2nd. Boom
 under former President Kim Dae-jung
administration
Overshooting to overcome the foreign currency crisis.
Wave the real estate sales tax
Abolition of the upper limit of sale price of newly-
built-housing
 `Participatory Government of Roh administration
Policy target for real estate: lessening real estate
polarization
Misunderstanding of the reason of the rising of real
estate price

130. ‥ 130 ‥
mistakes
 focused on the relative poverty rather than
absolute poverty.
Two kind of polarization
Focused not to the solving the problem of low income
class, but to the calm downing the jealousy.
High Income
Low Income

131. ‥ 131 ‥
Always rising?


132. ‥ 132 ‥
polarization
60
80
100
120
140
160
180
200
1990 1992 1994 1996 1998 2000 2002 2004
아파트
연립
단독
South of Han River

133. ‥ 133 ‥
What is the problem?
 Housing policy of earlier government.
Stable prices of housing for those with low income
 Then, what is the problem?
Jealousy

134. ‥ 134 ‥
More than income?
0
50
100
150
200
250
300
350
400
1990 1992 1994 1996 1998 2000 2002 2004
도시근로자소득
물가지수
서울아파트
강남아파트

135. ‥ 135 ‥
 The government should concentrate on supply
the cheap housing for the poor.
 No need to control the luxury housing for the
rich.

136. ‥ 136 ‥
•Win Hyde Park 3 in London (Left).
•560평 Penthouse 165.5 b. won
• Time Warner Center Penthouse. (center).
•New York Manhattan 79th flower – 33.5 b. won
•(right upper) 인도 출신의 철강왕 미탈이 2004년 사들인 저택1200억원
•Monaco - (오른쪽 아래). 블룸버그
세계적인 수퍼 부자 유치를 국가 전략으로 삼고 있음

137. ‥ 137 ‥
The Power of Chinese New Rich
자료발췌 : 조선일보 2009년 10월 21일
Villas at Sujun city in South China. The villa over 31 b.
won, & the apt. 8.5 b. won. Almost are sold.

138. ‥ 138 ‥발췌 : 2009년 10월 16일 조선일보
Hong Kong
'콘두잇 Road(天匯)’39 Apt
65.7 b. won for each.
The most expensive

139. ‥ 139 ‥
 The government regarded the speculation as
the reason of high price.
Because the Diffusion Ratio was over100%.
 Therefore
1. did not supply housing at Seoul metropolitan area
2. Supply only the other region with no demand
 So the Result
 Prices at Seoul Increased more
 Construction co. bankrupted because of an unsold
apartment in the other region.

140. ‥ 140 ‥

141. ‥ 141 ‥
 The supply decreased after 2002
 After 2006, increased at Metropolitan Area
except Seoul.

142. ‥ 142 ‥
Housing
construction
2000-2009
구 분
수 도 권
전 국
소계 서울 인천 경기
2000 241 96.9 20.5 123.6 433.5
2001 354.4 166.6 54.5 133.3 529.9
2002 376.3 159.8 55 161.5 666.5
2003 297.3 115.8 29.4 152.1 585.4
(증감률) -21.0 -27.5 -46.5 -5.8 -12.2
2004 205.7 58.1 22.4 125.2 463.8
(증감률) -30.8 -49.8 -23.8 -17.7 -20.8
2005 197.9 51.8 17.6 128.5 463.6
(증감률) -3.8 -10.8 -21.4 2.6 0.0
2006 172 40 16 116 470
(증감률) -13.1 -22.8 -9.1 -9.7 1.4
2007 302.6 62.8 41.6 198.1 556.8
(증감률) 75.9 57.0 160.0 70.8 18.5
2008 197.6 48.4 33.6 115.5 371.3
(증감률) -34.7 -22.9 -19.2 -41.7 -33.3
2009 255.1 36.1 59.5 159.5 381.8
(증감률) 29.1 -25.4 77.1 38.1 2.8
2010 상반기 65.2 14.0 10.6 40.5 110.3
(증감률) 36.9 35.1 -20.9 70.0 114.6

143. ‥ 143 ‥
Supply where no demand!
Trend of Unsold Apt. 2000~2007
0
20,000
40,000
60,000
80,000
100,000
120,000
00.12 01.12 02.12 03.12 04.12 05.12 06.12 07.9 07.12
서 울
수도권
지 방

144. ‥ 144 ‥
It reached 165 thousand housings
자료출처 : 조선일보(2010년 6월 25일)

145. ‥ 145 ‥
Trend of unsold apt.
145

146. ‥ 146 ‥
Daeku, most severe
 30% discount sale
discount 1억5000만 won
 Residents barricaded to
prevent new comers
from moving in.
대구 수성구 범어동
 "입주하려면 차라리 나를 밟
고 가라"며 길 위에 드러누웠
다. 치열한 몸싸움은 1시간 넘
게 이어졌다. 주민 10여 명이
경찰에 연행됐다
새벽 3~4시에 승용차로 '도둑
이사'

147. ‥ 147 ‥
Bankruptcy of construction cos.
자료출처 : 조선일보(2010년 6월 25일)

148. ‥ 148 ‥
'사형선고' 기다리는 건설사들…
자료출처 : 조선일보(2010년 6월 25일)

149. ‥ 149 ‥
Because of speculations?
 Even though Diffusion Ratio is over100%
The quality of residency is not so good.
There are new demand for higher quality.

150. ‥ 150 ‥
Housing area per person
 Resident housing area per person
3.5 times increase duuring 1990-2010
1990 9m2 =>2010 33m2 (2011년)
1인당 주거면적의 변화
2.9
3.5
4.3
5.2
6.1
7.5
1980 1985 1990 1995 2000 2005 연도
평수

151. ‥ 151 ‥
Quality of housing
Index 한국('08) 일본('03) 미국('03) 영국('02) 독일('02)
Diffusion Ratio
109.9
(100.7)
109.3 108.5('03) 105.2 100.6
No of housing
per 1000 people
291
(344)
422 416 426 473
Acreage per
housing (m2)
63.1('00) 94.9('00) 148('01) 87('01) 95
housing size per
person(m2)
23.0 (‘05) 33.8('00) 65.3('01) 44.0('01) 41.6('01)
Ratio of Self
owenership
62.9(’04) 61.2 68.3 70.4('03) 42.6
2008 주택수 (백만 호); 14.2 vs 16.7, 가구수 (백만); 12.9 vs 16.6

152. ‥ 152 ‥
conclusion
 Price depend on the power of supply and
demand in real estate market also like other
commodity market.
 Increase the supply is the most important.
 If it is impossible, then should accept the
increase of prices for the rich.
 For the poor, the government should supply
cheap public housing.

153. ‥ 153 ‥
Only for dwelling?
 double-sidedness of real estate
Consumer goods and
Demand was influenced by income and population
factor of production and Assets
Relative profitability should be considered.
 Selection criteria
Convenience
Distance to work place,
No of rooms and toilet,
Years, how old
accommodation(market, park
Prospect, future value

154. ‥ 154 ‥
 Can we push to consider only the convenience
to the people, whose asset is only this house?

155. ‥ 155 ‥
House as a means of investment
 means
saving – too low profitability
stock – too risky
business – need experience, health, large capital
Housing –
 until now, the easiest and safe investment with reasonalble
profit
 If national investment knowledge increased, it
will be changed.