Analysis of Policy Effectiveness for Curbing Real Estate Speculation in Korea—Seoul City Areas Subject to Permission of Land Transaction

Abstract

This study empirically examines the impact of the Areas subject to permission of transaction (ASPLT) implemented by Seoul City on local real estate markets. Focusing on the case of the Seoul International District (MICE project area), where the regulated area (the geo-graphical districts subject to ASPLT) was initially designated, lifted, and later re-imposed, the analysis employs a modified repeat sales Difference-in-Differences (DID) methodology to assess its policy effect on housing price stabilization. The results indicate that the regulated areas experienced more subdued transaction volumes and price increases compared to non-regulated areas, suggesting the policy was effective in curbing short-term speculative demand. Additionally, neighboring areas exhibited signs of spillover effects due to displaced investment interest. The findings highlight both the utility and limitations of localized real estate controls and offer empirical insights for future policy design.