Demographic Shifts, Macroprudential Policies, and House Prices

Jieun Lee and Hosung Jung
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Jieun Lee: Bank of Korea
Hosung Jung: Bank of Korea

International Journal of Central Banking, 2023, vol. 19, issue 5, 1-47

Abstract: We investigate how recent demographic changes — population aging and the rising number of single-person households — affect disaggregated house prices in Korea. Our analysis yields three key findings based on a unique data set, including various house price indices and macroprudential policy variables at the district level. First, house prices increase in districts with high old-age dependency ratios, suggesting that aging is unlikely to drive them down. Second, house prices fall in districts with a high proportion of single-person households. Third, the effect of heterogeneous demographic groups on house prices differs according to the macroprudential policy measures. Overall, the evidence suggests that demographic shifts are an essential factor for explaining house price dynamics.

JEL-codes: E58 G12 J11 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2023:q:5:a:1

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