Determinants of Housing Price by Region of Seoul

Abstract

This study conducted empirical analysis using the hedonic price model to examine regional differences in the determinants of housing prices among the representative examples of decoupling phenomena in inter-regional housing price movements, namely, “Gangnam 3-gu”, “Nodogang”, and “Mayongseong”, from 2017 to 2022. In the analysis results, the Gangnam 3-gu emerged as the region with the highest housing prices. It was observed that the longer the elapsed years, the more the anticipation of reconstruction was reflected in housing prices for older apartments. Additionally, a strong preference for convenient living facilities and an excellent educational environment was evident, indicating a dual focus on residential convenience and investment purposes. On the other hand, the Nodogang region had the lowest housing prices. The elapsed years were found to be significant only beyond a certain generational threshold. Preference for living convenience facilities showed contrasting results compared to the Gangnam 3-gu. Furthermore, the importance of proximity to subway stations was highlighted, indicating anticipation for reconstruction alongside the significance of convenient public transportation in this region. The Mayongseong region fell into the category of higher housing prices. It consisted relatively of newly constructed apartments, and the preference leaned more towards a pleasant residential environment rather than anticipation for reconstruction. This area exhibited a lower connectivity to subway stations, and there was a preference for a close proximity to local markets. In terms of pursuing residential convenience, it displayed similarities to the Gangnam 3-gu.