This study was conducted to identify how advance reservations for Bogeumjari housing actually influenced the housing market of Seoul and metropolitan areas (private apartment housing market) and to analyze how the changes of perceptions of prospective appliers and purchasers influenced the decision to apply for housing in the market after advance reservations for Bogeumjari housing.
The correlation between public and private housing supplies was explored to fulfill these aims. In addition, the background of the policy to supply Bogeumjari housing which started from housing for low-income newly-wedded couples and developed into public housing for rent or sale was explored while changes of this policy were analyzed. Also, methods of and plans for supply as well as laws and regulations on Bogeumjari housing supply were identified based on a literature review, various indexes, and statistical materials. Furthermore, the indexes influencing the housing market in the private sector such as supply in the private sector, actually perceived economic conditions, competition rates, changes of prices, and the amount of inventory housing were decided according to the previously made advance reservations for Bogeumjari housing.
Based on a survey conducted toward people living in Seoul and Gyeoggi-do areas where the first and second advance reservations for Bogeumjari housing were concentrated, the current system for advance reservations for Bogeumjari housing was evaluated. At the same time, the survey confirmed whether there had been changes to perceptions of prospective users on the market and what these causes were, if any.
The survey produced the following results.
First, the real estate product most heavily affected by Bogeumjari housing supply is the new private market.
Second, the size of housing in the new private market which competes with advance reservations for Bogeumjari housing is approximately 102 m! or smaller and the influence of policies supplying Bogeumjari housing on the decision for application to the new private market tends to be great.
Third, although the winning rate could be low, the will to maintain the application for Bogeumjari housing tended to be high as people thought that the overall conditions for application such as the selling prices in advance reservations for Bogeumjari housing were better than those of the private sector. At least, Bogeumjari housing supply does not work positively on the new private selling market.
Fourth, as advance reservations for Bogeumjari housing get further away from the city center to outskirts of metropolitan areas, breakaway rates are expected to increase, which enables to estimate that the impact on the private supply market will be relatively limited. This can come from reduced profits and disadvantageous access to the city center based on stagnated real estate and construction markets.
These results show that advance reservations for Bogeumjari housing such as increased supply from the public sector influence the recession of the private selling market of Seoul and metropolitan areas to a certain extent. The author believes that this paper is academically meaningful in terms that it has attempted to reveal how advance reservations for Bogeumjari housing mostly supplied by the government and public sector affect the decision for application of the private selling market and prospective applicants and that this will help the government to establish housing supply policies in the future.
As for the forms of advance reservations for Bogeumjari housing of Seoul and metropolitan areas, supply tends to take place 2-5 years prior to the main application and the actual date of move-in and the receipt of applications takes place by advertising several complexes as one unit. Based on the premise to lift green-belt regulations of Seoul and metropolitan areas, low prices, about 15% lower than the existing selling prices, are available within a 20km radius from the center of Seoul, which negatively affects the decision to apply for a competing private selling market of Seoul and metropolitan areas. If advance reservations for Bogeumjari housing of Seoul and metropolitan areas reduce the roles and functions of the private supply market and the private sector fails to exhibit its own characteristics and advantages, the efficiency of production and distribution of housing market of Seoul and metropolitan areas, which is divided into public and private sectors, will eventually decrease. As for the method of supply of advance reservations for Bogeumjari housing for sale, the roles shall be divided in a way that both public and private markets can coexist in a large sense to share housing construction and supply. There should be ways to improve the competitiveness of each area by developing Bogeumjari housing as the center of a certain local area rather than trying to lift green-belt areas and lower the selling price.
Finally, the author regrets that the subject area was limited to Seoul and metropolitan areas and the number of samples was small, resulting in failure to explore the impacts of advance reservations for Bogeumjari housing on the private market in multilateral ways. The Ministry of Land, Transport and Maritime Affairs designates not only the new housing areas since the supply of exhibition areas for Bogeumjari housing in October 2010. While the existing housing areas such as the national rental housing in local provinces are converted into Bogeumjari housing areas, the author looks forward to finding more additional studies on these local housing markets as Bogeumjari housing supply takes place not only in Seoul and metropolitan areas but in all parts of the country.