earticle

영어

The problem of rapid increases in the prices of new apartments has been one of the controversial issues in Korea. The problem has given rise to the price control policy for new apartments since 2007. There has been a variety of studies on the causes of the rapid increases in the prices of new apartments. However, this study argues that the phenomenon may be related with the redevelopment methods of the old urban areas. This study examines the effects of redevelopment methods on the new apartment prices based on the Box-Cox regression model. The regression analysis controlling for other important variables indicates that the prices of apartments constructed by housing construction company are higher than those of redevelopment apartments initiated by residents and public corporations. Also, this paper shows that the housing construction company has been the most important source of apartment supply. It implies that the variable of redevelopment methods is a significant factor which may affect the prices of new apartments. Based on the analysis, this article discusses the policy instruments which may reduce the rapid increases in the prices of new apartments. In particular this article argues that the vertical integration, corrections of real estate market failure, involvements of public coporation in housing redevelopment are important policy tools to alleviate the rapid price increases of new apartment. Also, it is argued that the regulations imposed on the redevelopment apartments by residents should be removed.