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Herding Behavior of the Seoul Apartment Market

  • Korea Real Estate Review
  • 2018, 28(1), pp.91-104
  • DOI : 10.35136/krer.28.1.7
  • Publisher : korea real estate research institute
  • Research Area : Social Science > Law > Law of Special Parts > Law of Real Estate
  • Published : March 31, 2018

KIm, Jung Sun 1 Yu, Jung Suk 1

1단국대학교

Accredited

ABSTRACT

In this study, the occurrence and degree of herding behavior as a market participant behavior in a housing market were analyzed. For the analysis method, the actual sales price was applied in the CSAD (Cross-sectional Absolute Deviation) model, which has been used the most of late for herding behavior analysis. For the analysis contents, these were subdivided into region, elapsed year, size, and market condition to analyze the regionality and the internal and external factors. For the study results, first, there was no herding behavior in the entire region of Seoul. By region, herding behavior occurred in the downtown, southeast, and northwest regions, which coincided with the results of the precedent study (Ngene et al., 2017). Second, in the market analysis by elapsed year, herding behavior was captured in dilapidated dwellings. By size, herding behavior was observed in small-scale (60㎡ or less) apartments and in 85㎡ or higher and less than 102㎡ national housing units. Third, during the time of the global financial crisis, herding behavior was not observed in all the regions, whereas when the market situations were in a boom cycle, it was observed in the northwest region. These results suggest that there is a difference from the stock market, where in a period of recession, herding behavior occurs intensively with the expanding fear of incurring losses. This study is significant in that it analyzed the market participant behaviors in the behavioral economic aspects to better understand the abnormal phenomenon in a housing market, and in that it additionally provides a psychological factor — market participant behavior — in market analysis.

Citation status

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