Between January and April of this year, $2.7 billion (3.7 trillion won) from stock and bond sales was used to buy homes in South Korea. A significant portion, $1.8 billion (2.4 trillion won), funded property purchases in Seoul, with approximately $730 million (1 trillion won) specifically targeting the affluent Gangnam districts (Gangnam-gu: $273.8 million, Songpa-gu: $261.1 million, Seocho-gu: $215.1 million). This trend highlights that investment profits from the strong domestic stock market are frequently being channeled into the high-end housing market, indicating a shift from stocks and real estate being alternative investments to stock profits fueling real estate demand.
This trend is particularly pronounced among those in their 30s, who accounted for the largest inflow of stock and bond sale proceeds into real estate, totaling $927.7 million (1.259 trillion won) during the same period. They were followed by those in their 40s ($817.3 million), 50s ($591.3 million), and those aged 60 and above ($360.7 million). The proportion of stock and bond proceeds used for purchasing homes valued at $1.1 million (1.5 billion won) or more has remained below 5% in recent years, reaching 4.7% in 2025 and 4.6% in 2024.
South Korea's policy chief, Kim Yong-beom, expressed concern that the wealth generated from the country's booming AI-led semiconductor industry could exacerbate property market risks and deepen inequality. He noted that while nominal economic growth is at its fastest pace in over two decades, driven by soaring semiconductor profits, many households and small businesses have not yet felt the benefits. Kim emphasized that historically, excess liquidity in the economy tends to find its way into the property market, and he suggested a "normalisation" of property holding and capital gains taxes to address this. Apartment prices in Seoul have already risen for 72 consecutive weeks, despite government cooling measures, with expectations of massive semiconductor industry bonuses further fueling high-end property demand in areas like Dongtan, Hwaseong.
Opposition parties and ruling party representatives have differing views on the proposed tax adjustments. While the ruling party supports preemptive measures like tax hikes to prevent reckless real estate speculation and ensure the AI windfall benefits a broader population, the opposition argues that tougher taxes on homeowners could lead to higher rents, ultimately burdening the working class and young generations. The discussion underscores the government's challenge in managing the economic implications of the AI chip boom, ensuring a more equitable distribution of wealth and preventing excessive speculation in the housing market.
