Many people believe that Real estate market has something to do with Financial market. In this belief this paper tests interjurisdictional correlations in four major cities(Gangnam, Gangbuk, Busan, Daegu) using VAR(employing Granger causality test, Im...
Many people believe that Real estate market has something to do with Financial market. In this belief this paper tests interjurisdictional correlations in four major cities(Gangnam, Gangbuk, Busan, Daegu) using VAR(employing Granger causality test, Impulse response function, Variance decomposition).
The results are as follows.
From mid 1990 s to early 2003 s, There is no correlation between Real estate market and Stock market in Gangbuk and Busan, except Gangnam and Daegu. I presumed even if there are some correlations, the relationship would be crowded out, because of the reason for that there are deep-seated demand and special circumstances.
After 1992 or 1998, the correlation between Real estate market and Corporate market is strengthened by far than before. By regional groups, in Gangnam and Daegu, there have some connection between Corporate market and Real estate market. Expressly, in Daegu, it s represented by 30~40% explanatory power from corporate bond yields.
So, both government and investor have to consider about the unique correlation which is variable according to the regions.