AN ANALYSIS OF THE INITIAL PRESALE RATE IN HOUSING PROJECTS USING A REGIME-SWITCHING MODEL

Myeong Hyeon Kim, Doo Won Bang and Hyuck Shin Kwon
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Myeong Hyeon Kim: Seoul National University of Science & Technology, Korea
Doo Won Bang: Korea Housing & Urban Guarantee Corporation, Korea
Hyuck Shin Kwon: Korea Housing & Urban Guarantee Corporation, Korea

The Singapore Economic Review (SER), 2023, vol. 68, issue 06, 2105-2126

Abstract: We analyzed to identify the determinants affecting the presale rate in the housing projects and verified whether there are differences in the determinants of that by regimes. We found that the effects of determinants, such as the ratio of the new apartments’ sales price to existing apartments’ prices, educational environment, the number of unsold houses, and the interest rate of a mortgage on the initial presale rate, could have been different depending on which regime the housing market belongs to. This suggests that the government in Korea and Asian countries should consider the differentiation in effects of the determinants depending on the regime when the government tries to make housing policies.

Keywords: Regime change; Hamilton model; Markov process; the determinants of the initial presale rate; presale (search for similar items in EconPapers)
JEL-codes: C32 R31 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S0217590823500078

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