An empirical analysis of the characteristics of residential location choice in the rapidly changing Korean housing market

This study examines the factors of residential location choice by considering the characteristics of the Korean housing market. From various factors of the residential location choice of a household, this study focuses on the effect of opportunities to engage in other activities, represented by accessibility, and the variety of housing tenure types-i.e., owner-occupied, Chonsei, and monthly rent-and the change of each type's share of the market. The results of this empirical study indicate that households will most often choose to live in districts with more accessibility (a representative variable of demand-driven market), more permitted housing floor space (that of supply-driven one), higher rents, and lower housing prices in the Seoul Metropolitan Area (SMA). That is to say, the rapidly changing Korean housing market indicates a transition phase from a supply-driven to a demand-driven one. The significance of the variables and their effects were different for each housing tenure type. This means that the tenure type choice of a household is influenced by the level of income and assets. The results of this study are significant in understanding the characteristics of residential location choices of Korea and the countries in the transition as well.