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Demographic Shifts, Macroprudential Policies, and House Prices

Author

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  • Jieun Lee

    (Bank of Korea)

  • Hosung Jung

    (Bank of Korea)

Abstract

We investigate how recent demographic changes — population aging and the rising number of single-person households — affect disaggregated house prices in Korea. Our analysis yields three key findings based on a unique data set, including various house price indices and macroprudential policy variables at the district level. First, house prices increase in districts with high old-age dependency ratios, suggesting that aging is unlikely to drive them down. Second, house prices fall in districts with a high proportion of single-person households. Third, the effect of heterogeneous demographic groups on house prices differs according to the macroprudential policy measures. Overall, the evidence suggests that demographic shifts are an essential factor for explaining house price dynamics.

Suggested Citation

  • Jieun Lee & Hosung Jung, 2023. "Demographic Shifts, Macroprudential Policies, and House Prices," International Journal of Central Banking, International Journal of Central Banking, vol. 19(5), pages 1-47, December.
    • Handle: RePEc:ijc:ijcjou:y:2023:q:5:a:1
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    More about this item

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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