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Policy Study Policy Improvement in Response to Structural Changes in the Housing Rental Market December 31, 2016

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Series No. 2016-04

Policy Study KOR Policy Improvement in Response to Structural Changes in the Housing Rental Market #Real Estate
DOIhttps://doi.org/10.22740/kdi.ps.2016.04 P-ISBN979-11-5932-201-3 E-ISBN979-11-5932-275-4

December 31, 2016

  • 프로필
    SONG, Inho
Summary
The factors influencing the shift from Jonsei to Wolsei(monthly rents) can be found within the changes in Korea’s demographic structure. This study shows that Korea’s rapidly aging household structure is connected to the paradigm shift in the rental housing market. The microdata on the rental housing market show that the proportion of Wolsei by single-person households marks 50%, meaning that long-term projections for these households can serve as a barometer to predict structural changes from Jonsei to Wolsei. The distribution of the age groups of single-person households shows that the number of single-person households aged below 30 will decline while those aged 60 and over will rise sharply, accounting for the majority of all single-person households. According to the analysis results, older household heads have a stronger tendency to choose Wolse, implying that a faster aging population will lead to more monthly rentals, particularly among seniors. The analysis also found that higher incomes entail larger housing demand for areas(m2) and a stronger preference for Jeonsei over Wolsei. Therefore, as Korea’s population aging accelerates and low income growth rate to exceed past Jonsei levels, the long-term projection of Korea’s rental housing market is that the proportion of Wolsei rentals will continue rise to surpass that of Jeonsei rentals, but both will coexist like an equilibrium rate in the market.

Current economic factors are also influencing the structural change of the rental market. As the conversion rate, i.e the rate applied to convert Jeonsei to Wolsei, hovers above the base interest rate, landlords are shifting from the former to the latter because from the leaser’s perspective, a lower interest rate means a smaller yield from Jeonsei deposits. Indeed, an increasing number of landlords are converting Jonsei to Wolsei―applying the conversion rate, which is 6-7%, higher than the interest rate―or starting on a monthly rent basis altogether. Subsequently, the conversion rate has become a driver in the rise in Wolsei rentals.

The long term shift from Jonsei to Wolsei is also related to housing demand. The long term housing demand is expected to increase at a slow pace and then start to decrease from 2035. This result is directly influenced by Statistics Koreas’ projections for population and households, which state that there will be a decline in the number of household members aged 60-64 from 2034, those aged 55-59 from 2029 and those aged 50-54 from 2028. Considering that the housing area is expected to contract in the long-run, counter measures are needed to shift the focus of housing market conditions and systems from supply to sustain and management.
Contents
발간사
요 약

제1장 서 론

제2장 주택임대시장의 구조변화 이해: 인구구조의 변화와 주거비 상승
 제1절 주택임대시장의 구조변화
 제2절 임차인의 주거비
 제3절 실효주거비 분석: 소득이 주거비부담과 소비지출에 미치는 영향

제3장 주택임대시장의 구조변화
 제1절 최근 주택임대시장의 구조변화 이해
 제2절 장기 주택임대시장의 구조변화 이해
 제3절 모형의 추정 결과와 해석
 제4절 장기주택수요면적 추정
 제5절 자가와 차가의 선택모형

제4장 요약 및 정책적 시사점
 제1절 요 약
 제2절 정책적 시사점

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