'Is the housing market in a bubble?' — A couple weighs going all-in on stocks and renting instead of buying

As South Korea's stock market rallies and the real estate market picks up steam, the dilemma facing would-be homebuyers is growing more acute.

Booilnam TV, an investment-focused YouTube channel with about 1.79 million subscribers, featured the story of a couple in their 30s wrestling with the home-buying decision in a video published June 21.

The couple said their current lease is expiring, forcing them to move. "Being pushed into the market against our will has become the biggest dilemma of our lives — whether to buy now or hold out," they said.

They said their combined after-tax monthly income is around 10 million won ($6,510), with an additional annual bonus of 20 million won. They currently live in Bundang under a jeonse — a lump-sum deposit lease — valued at 600 million won, and hold total assets of about 700 million won, including retirement pension funds and financial support from their parents.

The couple is weighing two options. The first is to use their 700 million won in savings, supplemented by a loan, to purchase an older apartment in a transit-oriented area in a mid-to-lower tier Seoul neighborhood, where prices currently stand at around 1.3 billion won.

The second option is to move into a monthly rental costing about 2 million won and wait another one to two years. Under that scenario, they estimate they could save an additional 70 million to 80 million won per year after rent and living expenses. "If we put the freed-up jeonse deposit to work, our total assets could grow to the high 800 million won range by next year," they said.

Still, the couple expressed anxiety on both sides of the decision. "We worry that housing prices may have already peaked — it feels like everyone who was going to buy has already bought," they said. "But if we wait another year and prices rise faster than we can save, the frustration would be hard to bear."

In response, the channel's host, known as Booilnam, said buyers entering the market now should not think of it as making money, but rather as closing a widening gap. "If you think buying a home will change your life, you'll either fail to buy at all or make the wrong choice," he said.

Noting the couple's annual income and asset level, he said, "They are fully capable of buying — they chose not to, not that they couldn't."

On current market conditions, he argued that home price growth is accelerating and that the country faces "at least three years of a historically severe supply drought."

"Large-scale ground-breaking would need to start this year for supply to ease three years from now, but we're already halfway through the year and almost no ground has been broken," he said. "Supply is expected to drop sharply across Seoul, Gyeonggi Province and Incheon. Waiting is unlikely to improve the situation."

He also drew a comparison with stock investing. "If you can manage other investments well enough that you don't envy homeowners, that's fine — but the key question is whether your actual investment returns can outpace apartment price gains," he said.

According to him, Seoul apartments have posted average annual gains of 8 percent over the past decade, while Gyeonggi Province has seen about 6 percent. Using a 1.2 billion won apartment as a baseline, a simple calculation suggests prices in Seoul would rise by about 200 million won over two years, and in Gyeonggi by around 130 million won. He added, however, that some parts of Seoul are already surging past last year's levels.

He also cautioned against the risk of channeling retirement pension funds and parental support money into stocks. "If housing prices fall, you can still live there — but stocks can take a long time to recover to their previous highs, and sometimes they never do," he said. "Spending every day comparing stock and real estate returns will take a psychological toll."

He further raised the possibility that government measures could tighten, including loan restrictions and an expansion of regulated zones. Drawing on past experience, he said: "We've been through this before. You save 50 million won and prices go up 100 million. You save 100 million and prices rise 200 million. You save 500 million and then loans get cut off — so you still can't buy." He argued that the government will always respond with regulations one step stronger than the market expects. "Ultimately, regulations may move faster than you can save."

bbo@heraldcorp.com