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An Analysis on the Determinants of Conversion Rate to the Monthly Rent of Jeonse Price: A Structural VAR Approach

Hwang, Gwan Seok 1

1국토연구원

Accredited

ABSTRACT

This study reviewed theories about the determinants of conversion rate of Jeonse price to Monthly rent and empirically analyzed the determinants of conversion rate of Jeonse price to Monthly rent through the SVAR model. The variables were selected by theoretically and the SVAR model was constructed with 5 variables such as mortgage loan interest rate, Housing Consumer Sentiment index, mortgage loan balance, Jeonse price to Housing price ratio, including conversion rate of Jeonse price to Monthly rent. Impulse and response function and variance decomposition were analyzed to find the determinants. As a result, in the short term, the conversion rate of Jeonse price to Monthly rent is strongly affected by the interest rate. And in the long term, it is influenced not only by interest rate but by also Housing Consumer Sentiment index, mortgage loan balance. It shows that the conversion rate of Jeonse price to Monthly rent fluctuates according to interest rate, but it can be affected by expectation of housing prices and activation of housing finance.

Citation status

* References for papers published after 2022 are currently being built.