Essays on real estate in the theory of finance: outlook and perspective

Abstract

This dissertation focuses on real estate market stability and related policies that have attracted interest from academics and policymakers since the aftermath of the 2008 global financial crisis driven by subprime mortgage. The first study analyzes the relationship between the US real estate market bubble and the financial crisis. As a result, the coming financial crisis is different from the real estate market in the past, and the macroeconomic environment surrounding the real estate market is also showing different patterns. The second study looks into the impact of real estate regulatory policies in South Korea. The study finds that timely real estate policies can contribute to an increase in market efficiency and to slowing down the critical time of the real estate bubble. The third study investigates the relationship between metropolitan subway networks and housing prices. Unlike capital cities, the metropolitan city of Gwangju’s housing prices tend to fall as accessibility to subway networks increase. Lastly, the cost of choosing a fixed-rate mortgage over an adjustable-rate mortgage is studied and it is found that more than half of mortgage borrowers pay an expensive mortgage to prevent unknown interest rate risk which is revealed to be affordable by this study.