With the stock market recently experiencing an exceptional boom driven by the semiconductor supercycle and the global big tech rally, unique changes are emerging in the real estate market as well. Representative examples include reducing jeonse deposits to use as seed money for stock investments, or using stock profits to move to higher-tier locations or purchase physical assets. It appears that the so-called "money move" phenomenon between asset markets is intensifying.

Withdrawing security deposits into stocks… 'Monthly rent conversion' and 'dividend housing' are new trends

The most notable change is the shift from jeonse to monthly rent. Mr. Jang (40), who lived in a jeonse apartment in Mapo-gu, Seoul, proposed to his landlord that he reduce his deposit from 250 million won to 50 million won and convert the rest to monthly rent. He calculated that receiving the deposit back and investing it in semiconductor and big tech stocks, which have recently been on the rise, would be more advantageous in terms of opportunity cost than paying monthly rent.

This trend is also clearly observed among the "FIRE movement" (those hoping for early retirement), centered around the 2030 generation. Mr. Kim, a 30-something office worker residing in Seongdong-gu, also repaid his Jeonse loan ahead of his lease expiration. Instead of extending the loan, he decided to pay monthly rent to his landlord using the money that would have been spent on bank interest. His goal was to secure cash tied up up to the loan limit to increase his holdings in US Big Tech stocks. As stock returns outperformed the cost of monthly rent, he effectively chose a strategy to maximize cash liquidity rather than relying on Jeonse loans.

A "dividend housing" model has also emerged among smart investors with substantial assets. A representative example is Mr. Choi, a man in his 40s who moved into a high-end officetel in Cheongdam-dong for a monthly rent of 8 million won. Mr. Choi keeps his principal (seed) in the stock market and fully funds his high monthly rent solely through average monthly dividends from U.S. high-dividend ETFs and big tech stocks. His reasoning is that since assets grow through compound interest in the stock market, there is no reason to tie up billions of won in cash as a jeonse deposit.

The Great Shift of Stock Profits… From Bonus-Integrated Purchases to Small Buildings

There are also successive cases where massive profits from the stock market flow directly into the real estate market, stimulating the buying and selling market. Recently, an investor who earned approximately 700 million won in profits from stock investments added this capital to upgrade both the size of their apartment and the location to a higher-tier area and moved.

In particular, the actions of executives and employees at major semiconductor companies, such as Samsung Electronics and SK Hynix, are leading this trend. Analysis suggests that those who received record-breaking performance bonuses are using this as seed money to further grow their assets through stock investments, and are subsequently purchasing a large number of newly built apartments in key areas of southern Gyeonggi Province, such as Dongtan and Yongin, which feature headquarters shuttle buses and pleasant living environments. Beyond simple investment demand, this "asset growth through proximity to work" by high-income professionals is effectively acting as the underlying reason for the strong housing price rally in these regions.

High-net-worth individuals who have reaped massive profits in the billions of won during the bull market are turning their attention entirely to purchasing commercial real estate, such as small commercial buildings or shopping centers. By establishing private corporations to circumvent acquisition taxes and loan regulations, they are purchasing buildings in areas like Gangnam and Hongdae worth around 5 billion won. This is a strategy to ensure portfolio stability by cashing out a portion of their earnings into tangible assets (taking profits) in anticipation of increased volatility in the stock market.

The apartment subscription market is also being driven by cash-rich investors. The shadow of the stock market bull run deep behind the recent phenomenon of hundreds of thousands of people flocking to price-capped apartments or "pick-up" (unranked subscriptions) in major areas of Seoul. This is because, unlike in the past when people relied solely on loans, it has become possible to sell a portion of one's stocks upon winning the lottery to immediately pay hundreds of millions of won in down payments and interim payments in cash.

Outlook for Money Move in the Second Half… 'New Variable' to Move the Real Estate Market

Given the situation, the prevailing view is that large sums of money from the stock market will flow into the real estate market in earnest during the second half of this year. In fact, the housing market has recently demonstrated this flow of liquidity by recording an upward trend for 71 consecutive weeks.

In particular, along with the massive performance bonuses received by executives and employees of large corporations such as Samsung Electronics and SK Hynix, the KOSPI index has surged nearly threefold over the past year, leading to a surge of people making large sums of money through stocks. As the number of investors whose assets have multiplied several times simply by investing in stocks increases, it is expected that if this massive capital flows into the real estate market in earnest, it will act as the most decisive variable shaking up the landscape of the housing market in the second half of the year.

You must shatter the illusion of a 'guaranteed win in stocks'... You must consider the risks of potential losses on the 'housing balance,' which is a legal contract.

One of the long-standing principles of asset management is to "not touch housing funds with a fixed term." However, in practice, this maxim has long since become meaningless. In fact, as success stories like the aforementioned Mr. Jang from Mapo—who withdrew his security deposit to invest in stocks and generated hundreds of millions of won in additional profits in a short period—are being shared, an increasing number of people are participating in asset transfers, even at the risk of taking on additional expenses.

However, experts unanimously agree that investors should invest by calmly considering the harsh realities of the asset market and the risk of loss, rather than becoming fixated solely on immediate success stories. In particular, one must not overlook the illusion that "investing in stocks guarantees profit." Even in the current bull market, fortunes vary starkly among individual stocks, and due to increased market volatility, it is not uncommon to find stocks plummeting by more than 501 TP3T in a short period. This means that while some may successfully transition to higher-tier investments through stocks, others, intoxicated by the belief that stocks are a surefire winning formula, could be secretly suffering massive losses.

In particular, it is crucial to bear in mind that housing transactions are strictly legal contracts. While general stock investments can simply be held onto even if prices plummet, real estate deposits and balances have fixed deadlines for fulfillment. If you fall into the illusion that the stock market will inevitably rise and invest your housing funds recklessly, only to suffer unexpected losses and fail to secure the balance by the scheduled date, you will have to bear the full brunt of unimaginable financial and emotional damage, including the forfeiture of the down payment and the termination of the contract due to legal liability.

An official from the financial investment industry emphasized, “No one can guarantee success or failure in the market, and just as asset markets have fluctuated with every external adversity such as the COVID-19 pandemic or global wars in the past, they always harbor the variable of a decline.” He added, “Since high returns are always accompanied by the price of high risk, one must abandon the illusion of ‘guaranteed profit’ and invest prudently by thoroughly calculating even the worst-case downturn scenarios to protect both housing stability and assets amidst asset market volatility.”