Seoul housing prices and the role of speculation

Qin Xiao, Donghyun Park

    Research output: Contribution to journalArticlepeer-review

    20 Citations (Scopus)


    Between June 1998 and March 2006, the price index of apartment houses
    in Seoul, Korea, more than doubled, while fundamentals such as GDP, wage, and
    population increased by less than 35%. This study examines the role of a rational
    speculative bubble in this price surge.We find that unobservable information explains part of the price volatility; and that a rational bubble proxy is a significant driver of prices.However, neither latent information nor rational bubble is enough to explain the recent housing price appreciation, even in conjunction with observable fundamentals.
    Original languageEnglish
    Pages (from-to)619-644
    Number of pages26
    JournalEmpirical Economics
    Issue number3
    Early online date31 Mar 2009
    Publication statusPublished - Jun 2010


    • speculative bubble
    • latent information
    • housing
    • market


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