A Study on the Appropriateness of Office Market Evaluation Indicators in Seoul

This study analyzed the effects of macroeconomic variables on rent and vacancy rates, which are representative indicators of the office market in Seoul, and examined the suitability of the two indicators. The analysis method used a VEC model that assumes a long-term equilibrium relationship betwEen variables in consideration of the time-varying characteristics of input variables and the endogenous generation between variables. As a result of the analysis, the GDP shock responds with a positive (+) coefficient value for rent and a negative (-) coefficient value for the vacancy rate, indicating that if GDP increases, the rent rises and the vacancy rate decreases. In addition, the shock of interest rates negatively affects the economy, having a negative (-) value for rent and a positive (+) value for the vacancy rate, and the shock of consumer prices has a positive (+) value for both rent and vacancy rates. As a result of the comparison of the two models, the vacancy rate model explains the Seoul office market well because of its high explanatory power and theoretical suitability, but the rent model was analyzed to have low explanatory power and theoretical suitability because rent is calculated as a bid rent. This is believed to be because even if there is an incentive to fall rent due to the economic downturn, most rental entities provide tenant incentives such as rental free while maintaining the asking price and contract rent, making it difficult to accurately calculate the survey for effective rent. Therefore, statistical institutions need to establish reasonable research methods and measures so that office rent indicators can reflect actual market rent levels.