A new phenomenon distinct from the past is clearly emerging in Seoul's real estate market in the first quarter of this year. People in their 30s are actively utilizing funds received through gifts or inheritance as well as proceeds from selling financial assets such as stocks and bonds to purchase homes. As home prices continue to rise and loan regulations are tightened, it is becoming increasingly difficult for individuals to enter the housing market based solely on their income. In this environment, it has been clearly confirmed in related statistical data that people in their 30s, the actual demand group, are receiving economic support from their families or liquidating investment assets they owned to cover the shortfall in funds.
Analyzing the data on Seoul home purchase funding plans received by the Ministry of Land, Infrastructure and Transport from the office of Representative Kim Jong-yang of the National Assembly's Committee on Land, Infrastructure and Transport reveals that in the first quarter of this year, gift and inheritance funds used for home purchases in Seoul totaled 2.1813 trillion won. The home purchase funding plan is a mandatory document that must specify the source of funds when purchasing a home; in regulated areas, all home transactions are subject to submission of this document, and in non-regulated areas, it must be submitted to local governments within 30 days of the contract date for transactions of 600 million won or more. The submission obligation has been officially applicable since October 27, 2020, for regulated areas including Seoul.
The most noteworthy point in this funding flow is the fact that the amount of gift and inheritance funds used by people in their 30s for Seoul home purchases reached half of the total, amounting to 1.915 trillion won. The following amounts by age group were: 40s, 526.5 billion won; 50s, 229.9 billion won; 60s and above, 227.8 billion won; 20s, 13.3 billion won; and under 20s, 2.2 billion won. The proportion of funds for the 30s rose from 34.8% in March 2023 to 40.9% in 2024, expanded to 43.5% last year, and for the first quarter of this year, this ratio surpassed 50%. The total amount of gift and inheritance funds mobilized for Seoul home purchases also surged from 174.51 billion won in 2023 to 332.57 billion won in 2024, reaching 657.79 billion won last year, recording the maximum value on an annual basis. A massive amount of funds reaching about one-third of the total amount for the entire last year was invested in just three months.
The presence of people in their 30s is also very prominent in home purchase funds raised by selling investment assets such as stocks, bonds, and cryptocurrencies. In the first quarter of this year, funds raised by people in their 30s through this method amounted to 721.1 billion won, surpassing both the 40s' 585.5 billion won and the 50s' 464.0 billion won. In the past, the 40s, who had relatively more asset accumulation, had held the largest share in this sector; indeed, from 2020 to last year, the 40s led every year in the scale of stock and bond sale funds. Last year, the 40s had 191.51 billion won and the 30s had 174.52 billion won. However, since February 10 of this year, the asset liquidation proceeds for stocks and bonds as well as cryptocurrency sales were included in the asset liquidation proceeds for the funding plan reporting item, which is interpreted as revealing the actual fund mobilization power of the 30s more clearly.
Experts cite the rise in Seoul home prices and the strengthening of financial regulations together as the background of these market changes. As housing prices rise, the burden of initial funds increases, and loan limits are bound by regulations, so young actual demand groups are receiving support from their parents or liquidating investment assets they own to launch home purchases. This also means that the barrier to entering the Seoul housing market has increased that much. This trend is likely to continue in the future depending on the level of Seoul home prices, the intensity of loan regulations, and the profit conditions of the risky asset market including cryptocurrencies.