How housing market responds to greenbelt relaxation: Case of Seoul Metropolitan Area, South Korea

Since 2000, South Korea has implemented greenbelt policy reform and released greenbelt land that had been subject to land development restriction for three decades in order to promote an increase in housing supply and mitigate housing price inflation. While several studies have examined the impact of the greenbelt relaxation on land use change and development patterns, few have examined whether released greenbelt land sufficiently leads to housing price stabilization. This paper relies on longitudinal data of the Seoul Metropolitan Area from 2001 to 2010 to explore the impact of the greenbelt relaxation on the dynamics of the SMA housing market. I find that an increase in land available for development through the policy reform tends to increase housing sale prices in the suburbs, while the influence of the greenbelt relaxation in the central city is negative or insignificant. These findings provide implications for a re-evaluation of the greenbelt policy with regular assessment of the relaxation plan.