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Housing Tenure Transition Decisions of Older Homeowners in Korea

Eui-Chul Chung 1

1건국대학교

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ABSTRACT

This study examines housing tenure transition decisions of homeowners. The focus is on transition from homeownership to renting. Based on a panel of households over 55 years of age obtained from 2004~2008 KLIPS data, discrete time hazard models were estimated to figure out the key determinants of tenure transition. Contrary to the traditional life cycle hypothesis, older owner households are not likely to move until the age of 75. Estimation results of hazard models show that the relative weights of housing asset to total asset and of financial asset to total asset are important variables in explaining older households’ tenure transition decisions. While the ratio of housing asset to total asset is positively related to their tenure status change from owning to renting, the ratio of financial asset to total asset negatively affects the change. This implies that housing wealth are not consumed until nonhousing wealth has been consumed. Another important finding is that demographic factors influence tenure transition decisions to a greater extent. Health status of household’s head and spouse, change in the head’s marital status, death or disappearance of the head are important determinants of tenure transition process. Employment status of the head is also found to be influential.

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* References for papers published after 2023 are currently being built.

This paper was written with support from the National Research Foundation of Korea.
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