KOSPI Market Cap Stands at About 6,135 Trillion Won on May 15, 24.8% Higher Than Seoul Metro Housing Cap at End of 2024
The market capitalization of apartments in Seoul increased by 9.4% over 1 year compared to April of last year, but the KOSPI market capitalization surged by 145.8% during the same period.
Driven by a semiconductor supercycle and a booming stock market, the KOSPI market capitalization is estimated to have practically surpassed the total market capitalization of housing in the Seoul metropolitan area. Analysis suggests that the so-called ‘money move,’ where funds once concentrated in real estate shift to the stock market, is becoming a reality.
The KRX Data Marketplace announced on May 18 that the KOSPI market capitalization was calculated at approximately $4,719 billion (7,078 trillion won) based on the closing price on May 15. This is about $938 billion, or 24.8%, higher than the total market capitalization of housing in the Seoul metropolitan area as of the end of 2024 (approximately $3,780 billion, provisional figure) announced by the Bank of Korea and the National Data Agency.
Just 1 year and 5 months ago, the situation was completely the opposite. At the end of 2024, the KOSPI market capitalization stood at $1,510 billion, merely at the 40% level of the Seoul metropolitan area housing market capitalization. This was due to a decrease of $125 billion, or 7.7%, from the end of the previous year ($1,635 billion) in the aftermath of the emergency martial law. Subsequently, as the improvement in semiconductor industry conditions coincided with a stock market rally, the KOSPI market capitalization surged by $3,208 billion, or 212.5%, in about 1 year and 5 months.
On the other hand, the housing market showed a relatively moderate trend. According to the Korea Real Estate Board, the comprehensive housing transaction price index last month rose by 1.9% nationwide and 4.4% in the Seoul metropolitan area compared to December 2024. Seoul rose by 9.8%, recording a relatively high growth rate, but it fell short of the KOSPI’s growth speed.
The change was also distinct even when expanding the scope to the entire Korean stock market. The total market capitalization of the domestic stock market, combining KOSPI, KOSDAQ, and KONEX, stood at $5,541 billion as of May 14, a level similar to the national housing market capitalization at the end of 2024 ($5,506 billion).
Experts analyzed that as the semiconductor boom and changes in the policy environment interlock, changes are also appearing in the flow of funds. Kim Kwang-seok, head of the Economic Research Department at the Korea Economic and Industrial Research Institute, said, “This is the result of a significant portion of the liquidity that would have headed toward apartments moving to the stock market,” and added, “The approach of considering apartments as a means of speculation and investment has weakened significantly, and up to now, a trend aligned with a productive finance stance is appearing.”
However, there are also points being raised that structural improvement is needed as the current upward trend is concentrated in certain sectors. Heo Jun-young, a professor at the School of Economics at Sogang University, said, “Money should flow from the unproductive real estate market to productive financing markets such as ventures and startups, but currently, funds are solely concentrating on semiconductors and large export conglomerates,” and added, “Sustainability can only be achieved by creating a structure where warmth spreads to related industries such as power and transmission, as well as the overall domestic demand.”
Jung Suk-yee
댓글
0