earticle

영어

Korean government removed unnecessary regulations such as the price control on new apartments in order to prevent distorting real estate market as well as worsening corporate earnings in 1999. However, the price control on new apartments has been re-introduced since 2007 due to the on-going concerns on asset reflation risk. On the other hands, a number of scholars and constructions experts have insisted that price ceiling should lead to a decrease in supply of new apartment as price is set by the government, based on building cost, rather than supply and demand. Few empirical studies have been made to support these controversies. This study aims at analyzing the impact of price control on new apartment market by applying ANCOVA(analysis of covariance). The results show that there were similarities of apartment supplies during the period 2004-2009 excluding the supplies in 2007, indicating no impact of price control on new property market. Therefore, unsold apartment problem does not seemed to be related to the price regulation but rather it does to oversupply of new apartments, especially in the non-metropolitan area.