• Korea Real Estate Review
• /
• v.24 no.1
• /
• pp.15-26
• /
• 2014

Using multivariate GARCH model, we estimate the relationship between the housing sale prices and lease prices in the Korean housing market. In the analysis of relationship between the rate of changes in sale and lease prices, the correlation coefficient of the apartment and detached house is higher than that of the townhouse. By housing type, the correlation coefficient between detached house and townhouse is higher than between apartment and detached house or apartment and townhouse. By housing size, there are no significant different results between the sales price and the rental price. The correlation coefficient between medium and small size is the highest in the apartment housing market, whereas the correlation coefficient between large and medium size is the highest in the detached housing market, resulting from the fact that people may be more interested in medium- and small-sized apartment and large- and medium-sized detached house. In the detached housing market, the correlation coefficient between large-medium size and medium-small size in the rental price is higher than that of sales price. This result implies that the process of the decision making between purchasing and leasing a house might be different.