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Despite a government push, the Kospi just feeds the housing beast

Korea’s ambitious initiative to shift money from real estate into stocks has paid off, sending the Kospi soaring by more than double in less than a year. But the success comes with an ironic twist: Many investors are now funneling their stock gains into buying homes, undercutting the government’s market reform strategy. A Seoul-based office worker surnamed Cho is a case in point. She has watched the Kospi rally with amazement and invests in Korean stocks herself. But she doesn’t plan to hold onto them long-term. Instead, she intends to use the gains as a stepping stone to purchase a home in an even more desirable location. “I plan to use the stock gains to either move to a better-located home or pay down the mortgage on the one I already own,” Cho said. “The Kospi has surged, yes, but with swings this wild, long-term investing feels too risky.” Cho isn’t alone in shifting stock gains into properties. Sales of stocks and bonds for a home purchase in Seoul jumped more than 70 percent from 2.25 trillion won ($1.5 billion) in 2024 to 3.9 trillion won in 2025, according to data from housing purchase fund procurement plans submitted to the Ministry of Land, Infrastructure and Transport and obtained by Rep. Kim Jong-yang of the People Power Party. Sales were most prominent in October at 576 billion won, when the Kospi broke past 4,000 points for the first time. The number of housing transactions in the month totaled nearly 70,000, jumping 23.2 percent from a year earlier, according to the ministry data.