The impact of financial regulation on changes in housing occupancy in the housing market

This study analyzes the relationship between financial regulation and changes in housing occupancy using micro-level data of 60,043 households from the Korea Housing-Finance Corporation from 2011 to 2022. The following conclusions are drawn from the results of the empirical analysis. First, an increase in income leads to a high possibility of new occupancy by homeowners in the future from current occupancy, whereas a rising relative price induces a lower probability of new occupancy by homeowners in the future. A similar pattern was exhibited in the case of future occupancy. Second, by classifying four types of housing occupancy plans—"current homeowner to future homeowner," "current homeowner to future tenant," "current tenant to future homeowner," and "current tenant to future tenant"—this study finds that an increase in income induces a high possibility of both moving up the property ladder from current to future homeowner and from tenant to homeowner occupancy. In contrast, a rising relative price lowers the probability of future housing occupancy. Finally, strengthening financial regulations in the housing market had a significant effect on the two types of future occupancy. This lowers the possibility of a change in occupancy from current tenant and current homeowner to future homeowner. This tendency is much stronger among current tenants.