Bertrand RENAUD is the former Housing Finance Adviser in the Financial Development Department of the World Bank where he worked on banking and financial development issues.He has studied most East Asian countries, in particular Korea since the 1970s and China since 1988. Dr. Renaud was actively involved in technical assistance programs to affected countries following the Asia crisis. He is the co-editor with Koichi Mera of Asia's Financial Crisis and the Role of Real Estate. He is the lead author of Markets at Work: Dynamics of the Residential Real Estate Market in Hong Kong. Dr. Renaud has recently published with Kyung-Hwan Kim, journal articles on the global housing boom and its aftermath following the US subprime crisis. He has also published other books that do not focus on Asia; one of which appeared in seven languages.?He has taught at the University of Hawaii where he created the first courses on urban development in Asia and was a member of the Center for Korean Studies. He has also taught at Seoul National University, M.I.T. and Hong Kong University. ?Dr Renaud gained considerable comparative policy experience on housing and urban issues in advanced economies as Head of the Urban Affairs Division of the OECD in Paris. Dr. Renaud was the recipient of the Donald Robertson Award in the UK in 1995 for his work on urban reforms and real estate privatization in Russia. He is a Fellow of the Weimer Graduate School of Advanced Studies in Real Estate and Urban Land Economics, Homer Hoyt Institute. Dr. Renaud received his doctorate from the University of California at Berkeley. Kyung-Hwan KIM is Professor of Economics at Sogang University in Seoul. Following his service as Academic Dean at Sogang, Professor Kim spent a sabbatical year at Singapore Management University where he lectured and did research on real estate, and in particular on real estate cycles. He is currently the Under-Secretary of the Ministry of Land, Infrastructure and Transport, Republic of Korea. Professor Kim has considerable experience of East Asian economies where he has consulted in a number of countries for the World Bank and other organizations. He has been urban finance advisor to the UN Centre for Human Settlements (Habitat). He is a past president of the Asian Real Estate Society and a Fellow of the Weimer Graduate School of Advanced Studies in Real Estate and Urban Land Economics, Homer Hoyt Institute. He is the co-author of the leading Korean urban economics text that has gone through several editions, and is also the co-author of the first Korean text in real estate economics that came out in September 2010. Professor Kim has been an adviser to the Korean government and is frequently asked by the media to participate in public policy debates on television and to write on current issues. He received his doctorate from Princeton University. Man CHO is currently Professor at the KDI School of Public Policy and Management in Seoul where he directs the program in real estate and real estate finance. Before 2007, Professor Cho spent 15 years at Fannie Mae in the U.S. where he worked initially in the Office of Housing Research then became Director of Credit Risk analysis and later Director of Credit Finance. He is currently Visiting Scholar at the Institute for Real Estate Studies, National University of Singapore. Professor Cho received his doctorate from the University of Pennsylvania.

• Preface xiPart I: Foundations and Emergence of Modern East Asian Housing Systems 11 Introduction: Motivations of the Study 31.1 The first comparative study of housing dynamics across East Asian countries 31.2 Distinguishing features of East Asian economies 61.3 Organization of the book 122 Growth Take-Offs and Emerging EA Housing Systems 212.1 East Asia and the global experience with growth and development 222.2 East Asian growth policies from an urbanization and housing perspective 272.3 East Asia has had the highest tempos of urbanization in the world 352.4 The 50% urban population marker signaled the arrival of the growth transition 362.5 Exceptionally powerful land price increases during East Asian growth take]offs 403 From Vernacular Housing to Organized Housing Systems 453.1 Housing transformation from a Von Thünen to a Krugman urban dynamic 453.2 Stylized facts of organized East Asian urban housing markets 483.3 Four distinct East Asian housing strategies during the period 1950–1980 503.4 Patterns of EA government intervention in housing policies 533.5 Transition from the take]off stage to sustained long]term economic growth 69Part II: Current East Asian Housing Systems 734 East Asian Housing Systems Today: A Regional Overview 754.1 Basic quantitative East Asian comparisons 764.2 Volatility of housing output across East Asia 814.3 The 1997 Asian Financial Crisis triggered important structural reforms 834.4 Limited impact of the 2008 global financial crisis on East Asian housing 874.5 Six economies, six different housing system behaviors 905 Housing Volatility in Japan and Taiwan: A Study in Contrasts 935.1 Japan: housing underinvestment followed by multiple asset bubbles 945.2 Taiwan: a housing market with little government intervention 1136 Housing Volatility in East Asian City States: Hong Kong and Singapore 1236.1 Hong Kong: volatility in an open economy with a dual housing system 1246.2 Singapore: where housing is part of macroeconomic policies 139Part III: Drivers of East Asian Housing Cycles: Evidence and Analysis 1537 East Asian Housing Price Cycles: The Evidence 1557.1 An overview of East Asian housing cycles 1557.2 Country]specific housing price dynamics 1617.3 Institutions and regulations shaping East Asian housing cycles 1758 Drivers of East Asian Housing Price Cycles: An Analysis 1878.1 What makes housing prices cyclical? An analytical overview 1888.2 Quantifying the role of market fundamentals in EA price cycles 1938.3 Two]way interactions between housing and the macroeconomy 201Part IV: The Six Actors of Housing Cycles in China and in Korea 2079 Housing During China’s Growth Transition 2099.1 Impact of investment]led growth policies on households 2109.2 The great housing boom during a unique decade 2159.3 Incentives and behavior of the six key players in China’s housing boom 2209.4 Channels of interaction between housing and other sectors of the economy 24310 Korea: Overcoming Housing Shortages and Stabilizing Housing Prices 24710.1 An overview 24710.2 Housing outcomes and housing cycles 24910.3 Key issues in housing policy 25810.4 Main players in Korean housing cycles and their behavior 26610.5 Looking ahead: Korean housing at a crossroads 277Part V: Conclusions 27911 Overall Findings and Outlook for East Asian Housing 28111.1 Distinctive characteristics of East Asian housing systems 28111.2 Issues and outlook for East Asian housing systems 289References 303Index of Names 329General Index 331

This is a significant contribution to the Real Estate Issues series... To make housing the central theme is welcome, since the role of the housing market in economic instability is crucial. The focus on East Asia will be valuable, given that most literature on real estate cycles has tended to concentrate on Europe and the US. The behavioural and institutional perspective that the authors favour should also provide useful insights. -Richard Barras, Property Market Analysis

Bertrand RENAUD is the former Housing Finance Adviser in the Financial Development Department of the World Bank where he worked on banking and financial development issues.He has studied most East Asian countries, in particular Korea since the 1970s and China since 1988. Dr. Renaud was actively involved in technical assistance programs to affected countries following the Asia crisis. He is the co-editor with Koichi Mera of Asia's Financial Crisis and the Role of Real Estate. He is the lead author of Markets at Work: Dynamics of the Residential Real Estate Market in Hong Kong. Dr. Renaud has recently published with Kyung-Hwan Kim, journal articles on the global housing boom and its aftermath following the US subprime crisis. He has also published other books that do not focus on Asia; one of which appeared in seven languages.?He has taught at the University of Hawaii where he created the first courses on urban development in Asia and was a member of the Center for Korean Studies. He has also taught at Seoul National University, M.I.T. and Hong Kong University. ?Dr Renaud gained considerable comparative policy experience on housing and urban issues in advanced economies as Head of the Urban Affairs Division of the OECD in Paris. Dr. Renaud was the recipient of the Donald Robertson Award in the UK in 1995 for his work on urban reforms and real estate privatization in Russia. He is a Fellow of the Weimer Graduate School of Advanced Studies in Real Estate and Urban Land Economics, Homer Hoyt Institute. Dr. Renaud received his doctorate from the University of California at Berkeley. Kyung-Hwan KIM is Professor of Economics at Sogang University in Seoul. Following his service as Academic Dean at Sogang, Professor Kim spent a sabbatical year at Singapore Management University where he lectured and did research on real estate, and in particular on real estate cycles. He is currently the Under-Secretary of the Ministry of Land, Infrastructure and Transport, Republic of Korea. Professor Kim has considerable experience of East Asian economies where he has consulted in a number of countries for the World Bank and other organizations. He has been urban finance advisor to the UN Centre for Human Settlements (Habitat). He is a past president of the Asian Real Estate Society and a Fellow of the Weimer Graduate School of Advanced Studies in Real Estate and Urban Land Economics, Homer Hoyt Institute. He is the co-author of the leading Korean urban economics text that has gone through several editions, and is also the co-author of the first Korean text in real estate economics that came out in September 2010. Professor Kim has been an adviser to the Korean government and is frequently asked by the media to participate in public policy debates on television and to write on current issues. He received his doctorate from Princeton University. Man CHO is currently Professor at the KDI School of Public Policy and Management in Seoul where he directs the program in real estate and real estate finance. Before 2007, Professor Cho spent 15 years at Fannie Mae in the U.S. where he worked initially in the Office of Housing Research then became Director of Credit Risk analysis and later Director of Credit Finance. He is currently Visiting Scholar at the Institute for Real Estate Studies, National University of Singapore. Professor Cho received his doctorate from the University of Pennsylvania.

• Preface xiPart I: Foundations and Emergence of Modern East Asian Housing Systems 11 Introduction: Motivations of the Study 31.1 The first comparative study of housing dynamics across East Asian countries 31.2 Distinguishing features of East Asian economies 61.3 Organization of the book 122 Growth Take-Offs and Emerging EA Housing Systems 212.1 East Asia and the global experience with growth and development 222.2 East Asian growth policies from an urbanization and housing perspective 272.3 East Asia has had the highest tempos of urbanization in the world 352.4 The 50% urban population marker signaled the arrival of the growth transition 362.5 Exceptionally powerful land price increases during East Asian growth take]offs 403 From Vernacular Housing to Organized Housing Systems 453.1 Housing transformation from a Von Thünen to a Krugman urban dynamic 453.2 Stylized facts of organized East Asian urban housing markets 483.3 Four distinct East Asian housing strategies during the period 1950–1980 503.4 Patterns of EA government intervention in housing policies 533.5 Transition from the take]off stage to sustained long]term economic growth 69Part II: Current East Asian Housing Systems 734 East Asian Housing Systems Today: A Regional Overview 754.1 Basic quantitative East Asian comparisons 764.2 Volatility of housing output across East Asia 814.3 The 1997 Asian Financial Crisis triggered important structural reforms 834.4 Limited impact of the 2008 global financial crisis on East Asian housing 874.5 Six economies, six different housing system behaviors 905 Housing Volatility in Japan and Taiwan: A Study in Contrasts 935.1 Japan: housing underinvestment followed by multiple asset bubbles 945.2 Taiwan: a housing market with little government intervention 1136 Housing Volatility in East Asian City States: Hong Kong and Singapore 1236.1 Hong Kong: volatility in an open economy with a dual housing system 1246.2 Singapore: where housing is part of macroeconomic policies 139Part III: Drivers of East Asian Housing Cycles: Evidence and Analysis 1537 East Asian Housing Price Cycles: The Evidence 1557.1 An overview of East Asian housing cycles 1557.2 Country]specific housing price dynamics 1617.3 Institutions and regulations shaping East Asian housing cycles 1758 Drivers of East Asian Housing Price Cycles: An Analysis 1878.1 What makes housing prices cyclical? An analytical overview 1888.2 Quantifying the role of market fundamentals in EA price cycles 1938.3 Two]way interactions between housing and the macroeconomy 201Part IV: The Six Actors of Housing Cycles in China and in Korea 2079 Housing During China’s Growth Transition 2099.1 Impact of investment]led growth policies on households 2109.2 The great housing boom during a unique decade 2159.3 Incentives and behavior of the six key players in China’s housing boom 2209.4 Channels of interaction between housing and other sectors of the economy 24310 Korea: Overcoming Housing Shortages and Stabilizing Housing Prices 24710.1 An overview 24710.2 Housing outcomes and housing cycles 24910.3 Key issues in housing policy 25810.4 Main players in Korean housing cycles and their behavior 26610.5 Looking ahead: Korean housing at a crossroads 277Part V: Conclusions 27911 Overall Findings and Outlook for East Asian Housing 28111.1 Distinctive characteristics of East Asian housing systems 28111.2 Issues and outlook for East Asian housing systems 289References 303Index of Names 329General Index 331

This is a significant contribution to the Real Estate Issues series... To make housing the central theme is welcome, since the role of the housing market in economic instability is crucial. The focus on East Asia will be valuable, given that most literature on real estate cycles has tended to concentrate on Europe and the US. The behavioural and institutional perspective that the authors favour should also provide useful insights. -Richard Barras, Property Market Analysis

Bertrand RENAUD is the former Housing Finance Adviser in the Financial Development Department of the World Bank where he worked on banking and financial development issues.He has studied most East Asian countries, in particular Korea since the 1970s and China since 1988. Dr. Renaud was actively involved in technical assistance programs to affected countries following the Asia crisis. He is the co-editor with Koichi Mera of Asia's Financial Crisis and the Role of Real Estate. He is the lead author of Markets at Work: Dynamics of the Residential Real Estate Market in Hong Kong. Dr. Renaud has recently published with Kyung-Hwan Kim, journal articles on the global housing boom and its aftermath following the US subprime crisis. He has also published other books that do not focus on Asia; one of which appeared in seven languages.?He has taught at the University of Hawaii where he created the first courses on urban development in Asia and was a member of the Center for Korean Studies. He has also taught at Seoul National University, M.I.T. and Hong Kong University. ?Dr Renaud gained considerable comparative policy experience on housing and urban issues in advanced economies as Head of the Urban Affairs Division of the OECD in Paris. Dr. Renaud was the recipient of the Donald Robertson Award in the UK in 1995 for his work on urban reforms and real estate privatization in Russia. He is a Fellow of the Weimer Graduate School of Advanced Studies in Real Estate and Urban Land Economics, Homer Hoyt Institute. Dr. Renaud received his doctorate from the University of California at Berkeley. Kyung-Hwan KIM is Professor of Economics at Sogang University in Seoul. Following his service as Academic Dean at Sogang, Professor Kim spent a sabbatical year at Singapore Management University where he lectured and did research on real estate, and in particular on real estate cycles. He is currently the Under-Secretary of the Ministry of Land, Infrastructure and Transport, Republic of Korea. Professor Kim has considerable experience of East Asian economies where he has consulted in a number of countries for the World Bank and other organizations. He has been urban finance advisor to the UN Centre for Human Settlements (Habitat). He is a past president of the Asian Real Estate Society and a Fellow of the Weimer Graduate School of Advanced Studies in Real Estate and Urban Land Economics, Homer Hoyt Institute. He is the co-author of the leading Korean urban economics text that has gone through several editions, and is also the co-author of the first Korean text in real estate economics that came out in September 2010. Professor Kim has been an adviser to the Korean government and is frequently asked by the media to participate in public policy debates on television and to write on current issues. He received his doctorate from Princeton University. Man CHO is currently Professor at the KDI School of Public Policy and Management in Seoul where he directs the program in real estate and real estate finance. Before 2007, Professor Cho spent 15 years at Fannie Mae in the U.S. where he worked initially in the Office of Housing Research then became Director of Credit Risk analysis and later Director of Credit Finance. He is currently Visiting Scholar at the Institute for Real Estate Studies, National University of Singapore. Professor Cho received his doctorate from the University of Pennsylvania.

• Preface xiPart I: Foundations and Emergence of Modern East Asian Housing Systems 11 Introduction: Motivations of the Study 31.1 The first comparative study of housing dynamics across East Asian countries 31.2 Distinguishing features of East Asian economies 61.3 Organization of the book 122 Growth Take-Offs and Emerging EA Housing Systems 212.1 East Asia and the global experience with growth and development 222.2 East Asian growth policies from an urbanization and housing perspective 272.3 East Asia has had the highest tempos of urbanization in the world 352.4 The 50% urban population marker signaled the arrival of the growth transition 362.5 Exceptionally powerful land price increases during East Asian growth take]offs 403 From Vernacular Housing to Organized Housing Systems 453.1 Housing transformation from a Von Thünen to a Krugman urban dynamic 453.2 Stylized facts of organized East Asian urban housing markets 483.3 Four distinct East Asian housing strategies during the period 1950–1980 503.4 Patterns of EA government intervention in housing policies 533.5 Transition from the take]off stage to sustained long]term economic growth 69Part II: Current East Asian Housing Systems 734 East Asian Housing Systems Today: A Regional Overview 754.1 Basic quantitative East Asian comparisons 764.2 Volatility of housing output across East Asia 814.3 The 1997 Asian Financial Crisis triggered important structural reforms 834.4 Limited impact of the 2008 global financial crisis on East Asian housing 874.5 Six economies, six different housing system behaviors 905 Housing Volatility in Japan and Taiwan: A Study in Contrasts 935.1 Japan: housing underinvestment followed by multiple asset bubbles 945.2 Taiwan: a housing market with little government intervention 1136 Housing Volatility in East Asian City States: Hong Kong and Singapore 1236.1 Hong Kong: volatility in an open economy with a dual housing system 1246.2 Singapore: where housing is part of macroeconomic policies 139Part III: Drivers of East Asian Housing Cycles: Evidence and Analysis 1537 East Asian Housing Price Cycles: The Evidence 1557.1 An overview of East Asian housing cycles 1557.2 Country]specific housing price dynamics 1617.3 Institutions and regulations shaping East Asian housing cycles 1758 Drivers of East Asian Housing Price Cycles: An Analysis 1878.1 What makes housing prices cyclical? An analytical overview 1888.2 Quantifying the role of market fundamentals in EA price cycles 1938.3 Two]way interactions between housing and the macroeconomy 201Part IV: The Six Actors of Housing Cycles in China and in Korea 2079 Housing During China’s Growth Transition 2099.1 Impact of investment]led growth policies on households 2109.2 The great housing boom during a unique decade 2159.3 Incentives and behavior of the six key players in China’s housing boom 2209.4 Channels of interaction between housing and other sectors of the economy 24310 Korea: Overcoming Housing Shortages and Stabilizing Housing Prices 24710.1 An overview 24710.2 Housing outcomes and housing cycles 24910.3 Key issues in housing policy 25810.4 Main players in Korean housing cycles and their behavior 26610.5 Looking ahead: Korean housing at a crossroads 277Part V: Conclusions 27911 Overall Findings and Outlook for East Asian Housing 28111.1 Distinctive characteristics of East Asian housing systems 28111.2 Issues and outlook for East Asian housing systems 289References 303Index of Names 329General Index 331

This is a significant contribution to the Real Estate Issues series... To make housing the central theme is welcome, since the role of the housing market in economic instability is crucial. The focus on East Asia will be valuable, given that most literature on real estate cycles has tended to concentrate on Europe and the US. The behavioural and institutional perspective that the authors favour should also provide useful insights. -Richard Barras, Property Market Analysis