Relationship between Public Amenities and Housing Prices in Seoul: Public Amenities that Residents Prefer
Studies on housing have shown that public amenities improve the quality of life and satisfaction of residents. This fact backs the South Korean government’s efforts to promote public facilities in the form of basic educational and cultural amenities that affect everyday life. However, there is a paucity of research into the exact nature of the effect of education and cultural facilities in an area on the housing prices.
Our study aimed to bridge this gap by examining the influence from two perspectives – apartment size and administrative spatial units, which in South Korea are Gu (district) and Dong (sub-district). The research aims to contribute to housing policies at home and the world over with its findings.
All 25 Gus and 424 Dongs of Seoul were included in the study. We calculated apartment prices by dividing the total sale price of all apartments sold in 2016 with the total number of sales and by using data on apartment sizes gathered from the Land and Transport Department and the Seoul Open Data Plaza. Public libraries and private academies were selected as educational factors that could potentially affect prices. Cultural factors included museums, art museums, historical sites, and parks. We used a spatial regression model that considered spatial autocorrelation after adopting an exploratory approach to selecting the most suitable regression model and verifying it with a likelihood ratio test.
Our research found that, at the Gu level, apartment size did not have a telling effect on the preference for amenities. Private academies, art museums, and general museums had a positive impact on apartment prices across sizes while historical sites and park areas had a negative one. The same was not true at the Dong level, however, where only private academies had the same effect–a positive one–on the prices of all apartment sizes. Museums only positively affected the prices of large apartments, while art museums positively affected the prices of only medium-sized apartments. Public libraries negatively affected the prices of large and small apartments, while park areas negatively affected the prices of medium, medium-small, and small apartments.
The difference at the Gu and Dong levels may be attributed to the difference in perception of administrative units among residents. A Gu usually extends beyond one’s neighborhood, whereas a Dong is within walking distance from one’s home, where accessibility is important. The findings on public libraries and park areas are surprising, nonetheless, but not inexplicable. Residents, who live close to park areas, often complain about the noise that park users make and public libraries are mostly relevant for people with children under 20 years of age.
All in all, these findings suggest that the success of government housing policies does not simply depend on the provision of housing but also on the fulfilment of definite needs and preferences of different residents. The findings of our study suggest that the government should focus on developing multi-functional public amenities based on various life stages to cater to the various needs of the public.
Title of the paper: Influence of Educational and Cultural Facilities on Apartment Prices by Size in Seoul: Do Residents’ Preferred Facilities Influence the Housing Market?
Authors: Minki Sung, Jung-Hoon Ki
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© 2021 Minki Sung