South Korea became an aged society in 2017, and it is predicted that the country will become a “super-aged” society in 2026. With the rapid changes in the demographic structure, problems experienced by the elderly regarding their physical and mental health are expanding to become a social phenomenon. For example, according to the Organization for Economic Co-operation and Development (OECD), the country’s suicide rate of older adults has increased every year since 2003. There has been little research on and few prevention programs to address these problems. Meanwhile, the living environment has been recognized as an important factor to ensure the elderly’s physical and psychological health as well as improve their quality of life. Considerable research on developing appropriate measurement instruments to assess mental health, especially for elderly people who may be isolated, is crucial to alleviate physical and mental problems associated with aging. However, often self-reported diagnosis does not reflect the cognitive impairment of older adults who experience loss of vision, semantic knowledge, and attention span. In light of these considerations, this study aimed to develop and test a new tool for measuring older populations’ mental and physical health. This was done by defining depression derived from the living environment as “dwelling depression” and measuring dwelling depression through projective image-based self-reported questionnaires. In the first experiment, to define and measure dwelling depression, 301 persons over 65 years old living in single and two-person households were surveyed using text-based dwelling depression questionnaires during September 1–30, 2017. Content validity and reliability were evaluated, and the Geriatric Dwelling Depression Index (GDDI) was clarified to define dwelling depression and categorize dwelling depression type. In the second experiment, to examine whether the projective image questionnaires could serve as a suitable replacement for the text-based questionnaires, the same participants were surveyed from January 22 to February 2, 2018. Content validity and reliability were evaluated, and then the correlations between the dwelling depression questionnaires and projective image questionnaires were determined. In addition, the GDDI based on the projective image questionnaires (GDDI-I, GDDI-K) was clarified, and the accuracy of the GDDI-I and GDDI-K was analyzed. The results showed that depression has a close correlation with dwelling satisfaction. Dwelling depression was categorized into potential, mild, moderate, and severe dwelling depression through the combination of GDDI and DDS ratio. Finally, through ROC curve analysis we verified that the projective image questionnaires could accurately predict the dwelling depression groups. The results from this study contribute to a profound understanding of geriatric depression derived from the living environment, and we hope they will provide a basis for further research on psychological diagnoses using projective images.