Chapter 4

Dynamics of House Prices and Bank Lending in Korea

Heeho Kima and Sae Woon Parkb,    aSchool of Economics and Trade, Kyungpook National University, Daegu, South Korea,    bDepartment of Business Administration, Changwon National University, Changwon, South Korea    E-mail:


This chapter studies the dynamics of house prices between the two Korean housing submarkets, a premium market of Kangnam area in Seoul and other provincial markets, and addresses the correlation between house prices, bank lending, and other macroeconomic factors such as income and interest rate during the study period (1999–2011). Unlike the previous literature, this study focuses on the exact effect of bank lending on ...

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