Government lending restrictions combined with a stock market rally have driven a sharp increase in Koreans selling stocks and bonds to finance home purchases.
Data from the Ministry of Land, Infrastructure and Transport, obtained by Rep. Kim Sang-hoon of the People Power Party on the National Assembly's Policy Committee, showed that proceeds from stock and bond sales used for home purchases totaled 3.89 trillion won ($2.8 billion) from July 2024 through January 2025, accounting for 3.9% of total housing funds.
The amount of home purchase funds sourced from stock and bond sales was 2.51 trillion won (1.4%) in 2020, 1.12 trillion won (1.4%) in 2022, and 3.18 trillion won (2.6%) in 2024. Last year, the figure approached 6 trillion won at 5.84 trillion won. In January alone, the amount reached 529 billion won. Housing fund source declarations are required for all home purchases in regulated areas including Seoul and for properties valued at 600 million won or more in non-regulated areas.
By age group, the share of stocks and bonds in home purchase funds for those in their 30s rose more than threefold from 1.3% in 2020 to 4.5% as of January. Annual stock and bond proceeds used by this demographic for home purchases rarely exceeded 1 trillion won. The figure hit 1.26 trillion won (2.0%) in 2021 when the KOSPI index reached 3,000 amid abundant liquidity following the COVID-19 pandemic, but remained at 682 billion won (1.3%) in 2020, 287 billion won (1.4%) in 2022, 357 billion won (1.7%) in 2023, and 740 billion won (2.2%) in 2024. The trend shifted starting July last year when the domestic stock market began its upward trajectory.
During the same period, the share for those in their 50s surged from 1.6% to 5.5%. The proportions also increased for those in their 20s (0.9% to 3.1%), 40s (1.5% to 3.8%), and 60s and older (1.0% to 3.9%).
Market observers attribute the diversification of funding sources to financial authorities' lending crackdown. The June 27 and October 15 measures lowered the maximum loan limit for borrowers in the Seoul metropolitan area to 600 million won. Purchasing high-priced homes has become difficult without disposing of existing assets or receiving gifts.
"As options for raising funds through loans have decreased, more buyers appear to be finding solutions through their own capital," said Yoon Su-min, a real estate specialist at NH NongHyup Bank.
Rep. Kim noted, "Young people without homes have a strong desire to use stock investment gains for purchasing their first home," adding, "Authorities need to consider easing rigid lending regulations, taking into account the characteristics of demand groups such as newlywed couples."
Bank lending continued to decline last month amid the government's stringent regulations and real estate pressure policies. As of February 26, mortgage loan balances at the five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH NongHyup—stood at 610.08 trillion won, down 46.9 billion won from the previous month-end. This marks the second consecutive monthly decline following January. Household loan balances at the five major banks also fell by 387.4 billion won over the month to 765.43 trillion won as of February 26.