A Comparative Study On Real Estate Control Policies Of China And South Korea: 8.31 Policy And Guo Liu Tiao

This paper investigates a comparative research of real estate control policies – policies with a certain purpose of stabilizing housing prices – in People’s Republic of China and in Republic of Korea in mid 2000 s, specifically focusing on the comparison of the “8.31 Policy” and “Guo Liu Tiao”, declared by the government of Republic of Korea in August 31 st 2005 and the government of People’s Republic of China in May 17 th 2006, respectively. The background of this research is related to the social phenomenon of real estate market boom during the mid 2000 s and corresponding government’s efforts to suppress speculation and enhance housing affordability for lowto-medium income households of each country as a countermeasure against severe inflation of housing prices. The research starts from the assumption that “Guo Liu Tiao” implemented by Chinese government in 2006 is more effective than “8.31 Policy” of South Korea, even though the effectiveness of both policy is controversial. The specific research methods include Times Series Analysis of Housing Price Index(HPI) and Autocorrelation Test of HPI for both China and South Korea, seasonally adjusted and differentiated. Ultimately, a conclusion is derived from the further comparison of Time Series Analysis data and graphs of China and South Korea after the elaborated introduction of the “8.31 Policy” and “Guo Liu Tiao,” illustrating that the result of three descriptive methods –(1) Trend of Housing Purchasing Price Index of each nation,(2) Differentiation, and(3) Autocorrelation test – confirms “Guo Liu Tiao” is more effective than “8.31 Policy.” Particularly, the autocorrelation coefficient of the time of “Guo Liu Tiao” implementation turns out to be negative value, while the autocorrelation coefficient related to “8.31 Policy” is positive value. In other words, “Guo Liu Tiao” is considered as one of the external factors that suppressed housing price, while “8.31 Policy” is associated with the outer factors that increased housing price, opposing the original intention of the policy implementation.