Impact of one-person households on detached housing sales prices

A considerable number of single-person households in Korea belong to the vulnerable social group, and as of 2015, more than 50% of them are showing a characteristic of being concentrated in a dilapidated detached dwelling which was subdivided into a small unit; in this context, the movements of the detached house market, and its development potential are directly connected to the residential stability problem of a single-person household. The purpose of this study is to diagnose the residential problem of a single-person household trough the empirical analysis of the relationship between detached housings sales prices in housing sales market and one-person households. After analysing the detached housing sales data in Seoul, it was verified that the SPAR (Sales Price Appraisal Ratio) of the area heavily resided by one-person households was statistically significantly high compared to other areas. In order to verify whether this positive correlation is established in case of total age groups of one-person households, or even in case of a transactions motive for reconstruction, the multiple regression analysis by using the hedonic model was implemented. As a result, the positive (+) relationship exists in the areas heavily resided by young one-person households, and there is a concern of relatively increased future residential cost burden of the young generation. Also, in case when the transactions are intended for reconstruction purposes, there was a negative (–) impact by the one-person households on the sales prices. From developers’ point of view, it seems that the concentration of one-person households can lower the possibility of repayment of loans borrowed for the reconstruction, the possibility of housing sales, and the rent profit. Therefore, it is difficult to expect the improvement in deteriorated areas heavily populated by one-person households to function as a market; hereupon, the government’s aggressive intervention seems to be inevitable.