Impact of Touristification on Housing Market in Seoul

Min-Sung Kim, Jinseok Kim and Boram Lee

ERES from European Real Estate Society (ERES)

Abstract: Sharing economy has been growing and playing a significant role in the real world. For instance, guesthouses allow people to share their home and provide unique experiences to some travelers. However, it generates unexpected impacts on the neighborhoods.- residents as well as local shops in these cities are at risk of being forced out as property prices and rents rise due to the uncontrollable flow of tourists. This paper examines the impacts of tourism gentrification (touristification) on housing market, using a case study in Seoul. The result shows that guesthouses, including Airbnb, bring tourists, changes types of retails in the neighborhood, increases property values, and eventually kicks out residents. It has changed the land use, ultimately led displacement of local stores to new retail stores and franchises in the community. Analysis of stakeholders indicates that both residents and mom and pop shops are gentrified by new cafes and restaurants for tourists, but then these new stores also become gentrified and turn into franchise in the end. Moreover, it is found that as the real estate bubble bursts, the guesthouse is considered as profitable and the return on investment in guesthouse is higher than that of apartments and officetel in Seoul. The in-depth interviews with residents also reveal that it accelerates the relocation cycle of tenants due to the capital into the real estate market. This change of real estate investment trend demonstrates the importance of consumption-oriented activities in residential space and suggests the role of government and policy recommendations to ease rising rent in tourist areas.

Keywords: Guesthouse; Housing Market; Sharing Economy; Touristification (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2018-01-01
New Economics Papers: this item is included in nep-pay, nep-tur and nep-ure
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