Demographic Changes and Characteristics of the Housing Supply in Korea
Purpose: This study aims to predict the impact that rapid demographic changes will have on the housing market in Korea if current trends in population, household size, and supply continue. Design/Methodology/Approach: Two hypotheses concerning the housing oversupply were formulated. Estimates of population, households, and housing are done using time-series analysis with ARIMA modelling. The determination of household-housing size distribution was analyzed by quantile regression model. Findings: The results indicate that there will be 612.7 houses per thousand people in Korea by 2045 and that the housing supply ratio will reach 140.2%. Furthermore, evidence suggests that there will be an oversupply of medium-to-large-sized dwellings. If current demographic and housing patterns continue, there could be devastating consequences. Practical Implications: This study urges awareness about the present shifts in population and household size and suggests that resultant changes in housing supply patterns are inevitable. Moreover, by presenting empirical figures, these findings could also lead to the implementation of concrete policies. Originality/Value: The study suggests that the continuation of current patterns may lead to serious problems, especially considering the fact that these population changes not only affect Korea but all countries that underwent rapid industrialization. Therefore, this study provides a good source of insight for other countries that are experiencing similar phenomena in Korea’s wake, and it may help prepare them to address these issues.