An Empirical Study on the Impact of Upzoning on House Prices: Focusing on the Naebang Station Intersection in Seoul

This study uses the Differences-in-Differences (DID) method to examine the impact of upzoning announcements on house prices near Naebang Station. Data were analyzed using two models: apartments and townhouse & multi-family based on Chow Test result. We find that the upzoning announcement significantly increased house prices within 200 meters of Naebang Station upzoning area with statistically significant rises for townhouses and multi-family units, suggesting a positive externality. Apartments did not show significant effects, however we found significant price rise for townhouse and multi-family units due to substantial future development potential. Housing redevelopment projects also statistically significantly impacted house prices and there is much greater price increase in the redevelopment project. These findings highlight the need for policy-makers to anticipate varied market responses to rezoning initiatives and tailor policies to different housing types and neighborhood characteristics, contributing to a better understanding of upzoning policy impacts on housing markets.