Why do households rent while owning houses? Housing sub-tenure choice in South Korea

This study aims to analyze the effects of household characteristics on housing sub-tenure choice and understand the behavior of families who opt to rent while owning other homes in South Korea. Tenure status is subdivided according to the difference between consumption and investment demands for housing. It is found that that when families are faced with the choice of renting while owning another house, the probability that they will decide on this option increases up to the sixth income decile and then declines. Similarly, this probability increases until the tenant reaches age 50 and then decreases. Furthermore, the probability of a household choosing to rent while owning another home is greater if a member of the household is married with school-age children.

► The research models the multinomial logit regression of housing sub-tenure choice in South Korea.
► It is found that households who own cheaper housing are more apt to rent while holding their property.
► Families over a certain income level choose to buy an additional house rather than rent.
► Married homeowners with school-age children are more likely to rent while owning.