"2 Trillion Won Money Move from Stocks and Bonds to Real Estate... What Happened in Just Half a Year of the 600 Million Won Loan Cap"

2.0948 Trillion Won in Home Purchase Funds
Shifted to Seoul Just Six Months After June 27 Real Estate Measures
Nearly Doubled Each Year Over the Past Three Years

Seoul apartments Yonhap News

It has been confirmed that, within just six months of the June 27 measures that capped home mortgage loans in the Seoul metropolitan area at 600 million won or less, more than 2 trillion won in proceeds from stock and bond sales moved into funds for purchasing homes in Seoul.

According to aggregated data from the Ministry of Land, Infrastructure and Transport on funding plans for home purchases in Seoul, released on the 10th by the office of People Power Party lawmaker Kim Jongyang, a member of the National Assembly’s Land, Infrastructure and Transport Committee, the amount of “stock and bond sale proceeds” used to purchase homes in Seoul from last July to December, immediately after the June 27 measures took effect, totaled 2.0948 trillion won.

The funding plan is a document that discloses the source of funds for acquiring a home. It must be submitted to the relevant local government within 30 days after signing a sales contract for any home in a regulated area (adjusted area or speculative overheating district), as well as for any home priced at 600 million won or more in a non-regulated area. In regulated areas, submission of the funding plan has been mandatory since October 27, 2020.

The amount of funds for purchasing homes in Seoul that was raised by selling stocks and bonds decreased from 2.0058 trillion won in 2021 to 576.5 billion won in 2022, but then increased to 1.0592 trillion won in 2023, 2.2545 trillion won in 2024, and 3.8916 trillion won last year, roughly doubling each year over the past three years.

In particular, the proceeds from stock and bond sales used to purchase homes in Seoul over the seven months from last July to this January reached 2.3966 trillion won.

By month, the figures were 194.5 billion won and 184.1 billion won in July and August last year, respectively, rising to 463.1 billion won in September and then jumping to 576 billion won in October. This was followed by 299.5 billion won in November, 377.7 billion won in December, and 301.8 billion won last month.

October last year, when stock and bond sale proceeds used for purchasing homes in Seoul over the past seven months were at their highest, was the month when the Korea Composite Stock Price Index (KOSPI) exceeded 4,000 for the first time in history. It was also the month when the October 15 measures were announced, which strengthened regulations so that, in regulated areas and the Seoul metropolitan area, homes priced above 1.5 billion won and 2.5 billion won, respectively, can receive home mortgage loans of only up to 400 million won and 200 million won.

As strict loan regulations made it difficult to raise home purchase funds through the financial sector, it appears that a large amount of realized gains from stock investments flowed into the housing market.

Over the past seven months, Gangnam District recorded the largest amount of stock and bond sale proceeds used to purchase homes in Seoul, at 378.4 billion won. During this period, the amount of stock and bond sale proceeds that flowed into the three southeastern districts (Gangnam, Seocho, and Songpa) was 909.8 billion won, accounting for 37.9% of the total.