Seoul’s housing market is seeing a shift in funding sources as tightened lending regulations take hold. With bank loan limits restricted, a notable increase has been observed in individuals liquidating stocks and bonds to finance home purchases. The trend underscores the impact of recent policy interventions aimed at cooling the property market.
According to data from South Korea’s Ministry of Land, Infrastructure and Transport, the total funds derived from stock and bond sales used for Seoul home purchases reached ₩2.03 trillion (approximately $1.5 billion USD based on current exchange rates) between July and December of last year. This figure coincides with the implementation of the ‘6.27’ measures, which restricted loan-to-value ratios in the greater Seoul area and other designated regulatory zones.
The ‘funding source plan’ – a document required for all housing purchases in regulated areas and for properties exceeding ₩600 million (approximately $442,000 USD) in non-regulated areas – reveals a sharp increase in capital flowing from financial markets into Seoul real estate over the past three years. Funds from stock and bond sales totaled ₩576.5 billion in 2022, rebounding to ₩1.059 trillion in 2023. In 2024, this figure rose to ₩2.2545 trillion, culminating in ₩3.8916 trillion last year – representing roughly a doubling of investment year-over-year.
The most significant influx of funds occurred between July and January of this year, totaling ₩2.3966 trillion. Monthly inflows peaked in September (₩463.1 billion) and October (₩576 billion) of last year, a period coinciding with the peak of the KOSPI index – South Korea’s benchmark stock market index – surpassing 4,000 points and the announcement of further restrictions on high-value home loans on October 15th.
Concentration in Gangnam and Surrounding Areas
The capital generated from stock and bond sales is heavily concentrated in Seoul’s affluent Gangnam district and its neighboring areas. Over the past seven months, Gangnam-gu accounted for the largest share of inflows, at ₩378.4 billion. Collectively, the ‘Gangnam 3’ – Gangnam, Seocho, and Songpa – attracted a total of ₩909.8 billion, representing 37.9% of the total capital flowing into Seoul’s housing market.
Experts attribute this trend to a combination of stricter lending regulations and favorable conditions in the stock market. With access to traditional housing loans becoming more difficult, investors are capitalizing on gains in the equity market to finance property purchases. “The movement of securities disposal income into the real estate market is a result of asset holders disposing of stocks and then purchasing real estate, which is perceived as a relatively safe asset,” noted a representative from a major commercial bank.
The government is responding to this shift by intensifying scrutiny of funds used in property transactions. Amendments to the Real Estate Transaction Reporting Act, which came into effect on February 10th, now require the disclosure of funds derived from cryptocurrency sales in the ‘funding source plan’. Detailed information regarding overseas funds – including deposits and loans – must also be provided.
“Recently, there’s a growing tendency for people to use profits from the stock market as a foundation for homeownership,” said Jeong Seong-jin, CEO of Urban Asset Management. “Housing is seen as an asset that maintains its residential value regardless of price fluctuations, which supports the influx of funds from stock sales into the real estate market.”
The tightening of mortgage rules, capped at ₩600 million regardless of property price or borrower income, implemented by the Lee Jae Myung administration in June 2025, was intended to curb speculative investment and address rising household debt. However, the data suggests that demand remains robust, albeit channeled through alternative funding sources. The government also imposed mandatory residency requirements, reduced maximum loan terms and blocked mortgages for multihomeowners in these zones.
The surge in funds from stock and bond sales highlights the resilience of Seoul’s housing market and the adaptability of investors in the face of regulatory changes. While the government’s efforts to cool the market are evident, the continued flow of capital into real estate suggests that further measures may be necessary to achieve its objectives. The concentration of investment in the Gangnam area also raises concerns about regional imbalances and the potential for continued price appreciation in prime locations.
