"Productive finance" versus "ruinous speculation." These are the contrasting views the Lee Jae-myung administration holds regarding the stock market and the real estate market. While the government has been encouraging a "money move" from real estate into stocks, approximately 10 trillion won worth of financial asset liquidation proceeds—such as stocks—was poured into purchasing homes between January and September of this year. Statistics show that roughly one out of every four apartment buyers nationwide utilized stock sell-off funds to make their purchases.

According to data submitted by the Ministry of Land, Infrastructure and Transport to People Power Party lawmaker Kim Jong-yang on the 25th, the proceeds from selling stocks, bonds, and cryptocurrencies used for housing purchases nationwide from January to September amounted to 9.3273 trillion won. This accounts for 6.2% of the total housing purchase funds of approximately 150 trillion won—about double the 3.1% proportion recorded for the entirety of last year.

In Seoul, the proportion of housing purchase funds coming from the liquidation of financial assets surged from 3.7% last year to 7.9% through September of this year. Non-regulated areas outside the capital region also saw an increase from 2.7% to 4.3% over the same period. Considering transactions exempt from submitting a source-of-funds statement, the actual scale could be even larger.

Conversely, the proportion of lease deposits, such as jeonse (lump-sum housing deposits), dropped sharply to 6.7% this year, down from 16.8% in 2024 and 14.7% last year. Analysts attribute this shift to tightened actual residency obligations. Meanwhile, the proportion of gifts and inheritances rose from 3.5% to 5.3%, and other borrowings increased from 2.3% to 4.2%.

Critics point out that the government must break away from viewing real estate solely as an object of speculation while turning a blind eye to its productive functions. Cho Joo-hyun, professor emeritus of real estate at Konkuk University, noted, "In a situation where housing anxiety drives capital inflows into the real estate market, the government cannot escape responsibility. Construction investment accounts for about 15% of Gross Domestic Product (GDP) and exerts a massive ripple effect on forward and backward industries, including job creation."

The high volatility of the stock market and expectations of rising real estate prices also act as constraints against capital shifting. Kang Hyung-goo, a professor of finance and management at Hanyang University, emphasized, "Policies connecting real estate capital to the growth capital of innovative companies are necessary—such as providing tax benefits when rental income and capital gains from real estate are long-term invested in innovative firms and growth funds."

"Let's Move into Gangnam This Time": The 9,000-Point Milestone's Ultimate Goal Was 'Buying a Home'

Stock and Crypto Investment Profits Flow into the Real Estate Market
Back in May, the domestic stock market continuously broke all-time highs. The KOSPI index surpassed the 7,000 mark for the first time on May 6th, followed by breaking the 8,000 threshold on the 15th. While the stock market was celebrating, funds grown through stock investments flowed directly into the real estate market. In May, 28.9% of transactions subject to housing purchase fund-submission plans utilized proceeds from selling stocks, bonds, and cryptocurrencies. The amount reached 1.9947 trillion won, accounting for 8.2% of all purchase funds—the highest monthly figure so far this year. In June, when the KOSPI hit its all-time record closing high (9,114.55), another 1.3344 trillion won in liquidated stock and other assets was spent on buying homes.

Higher-Priced Homes Show Greater Reliance on Stocks

Analyzing the fund-submission data provided by lawmaker Kim Jong-yang of the National Assembly's Land, Infrastructure and Transport Committee on the 25th, the liquidation proceeds of stocks and other assets used for housing purchases peaked between April and June of this year, a period when the stock market was booming. A clear trend emerged of utilizing wealth generated by stock price surges to buy homes.

Yoon Ji-hae, a real estate commentator, explained, "Houses are essential goods directly tied to life satisfaction, such as commuting convenience and children's educational environments, whereas stocks carry more characteristics of discretionary goods. A pattern is emerging where people invest in stocks with the goal of buying a home, and then shift their capital to real estate once funds accumulate."

The higher the price of the home, the greater the reliance on proceeds from selling stocks and other assets. For homes priced at 30 billion won or more, the proportion of stock liquidation proceeds among purchase funds rose from 16.0% in January of this year to 18.9% in September—about 2.6 times last year’s annual average of 7.25%. On the other hand, homes priced under 300 million won saw a slight decline from 2.3% to 2.1% over the same period.

Analysts suggest that loan regulations have widened the gap in funding methods across housing price brackets. Under the "October 15 Measures" introduced last year, loans are capped at up to 600 million won for homes priced at 15 billion won or less, 400 million won for homes exceeding 15 billion won up to 25 billion won, and 200 million won for homes exceeding 25 billion won. Furthermore, the Total Debt Service Ratio (DSR) regulations apply.

Mid-to-Low-Priced Areas Rely on Stocks and Debt in 'Yeong-geul' (All-In Borrowing)

Among Seoul's 25 autonomous districts, the proportion of stock liquidation funds utilized for housing purchases surged significantly in the "Gangnam 3-gu" (Gangnam, Seocho, and Songpa districts) and Yongsan district. Seocho District jumped from an annual average of 5.3% last year to 15.7% between January and September of this year—a 10.4 percentage point rise. Gangnam District rose from 5.5% to 15.0%, Yongsan District from 7.0% to 15.0%, and Songpa District from 4.1% to 10.6%.

In these regions, the proportion of loan amounts and lease deposits within purchase funds decreased. Analysts interpret this as buyers filling the capital gaps—created by loan regulations and gap investment (purchasing a home with a tenant's lease attached) restrictions—using stock liquidation proceeds and gifts or inheritances. The proportion of gift and inheritance funds in the Gangnam 3-gu and Yongsan district also climbed from 4.7% last year to 6.9% between January and September of this year.

In contrast, outer mid-to-low-priced districts in Seoul, such as Nowon and Guro, saw an expansion not only in stock liquidation funds but also in loan proportions. This reflects an increase in actual end-users taking out loans to secure their own homes as lease and monthly rental burdens escalate. First-time homebuyers can receive a Loan-to-Value (LTV) ratio of up to 70%. Kim Jun-hyung, a real estate professor at Myongji University, stated, "As housing rents continue to rise, end-users are choosing to buy homes rather than continue bearing expensive rental costs." Nationwide, the proportion of loan amounts within housing purchase funds stood at 26.4% this year, similar to last year's 25.7%.

According to the Korea Real Estate Board, Seoul's apartment jeonse (lease) prices rose by 8.7% through the 19th of this year, quadrupling the increase rate (2.2%) of the same period last year. Gyeonggi (6.2%) and Incheon (4.5%) also saw jeonse price growth rates outpace last year, driven by a drop in supply and strengthened actual residency requirements.

Experts advise that the government must alleviate housing instability by easing loan regulations centered on genuine end-users and increasing public housing supplies in core locations. Lawmaker Kim criticized, "The government's dichotomy—viewing stocks as productive finance and homes as ruinous speculation—ignores the reality that money earned from stocks ultimately ends up being used to buy houses. By choking off loans and gap investments, they are only amplifying 'parental chance' mechanisms like inheritances and gifts."

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