Why Investors Should Not Abandon the Korean Stock Market

1. KRW 1,800 Trillion: A Signal of Structural Saturation

The fact that Seoul’s real estate market capitalization has reached approximately KRW 1,800 trillion is not merely the result of rising prices. It is a symbolic figure that reveals how far Korea’s asset structure has progressed. Housing prices in Seoul now account for nearly half of the nation’s total residential value, signaling not a market still in its growth phase, but one approaching structural saturation. The problem is not the price level itself, but the reality that this structure can no longer support both society and the economy at the same time.

For a long time, rising real estate prices functioned as an implicit answer within Korean society. Real estate absorbed the enormous liquidity required during industrial expansion, and that liquidity, through collateral and credit, expanded the financial system. When property prices rose, household assets increased; when assets increased, consumption and investment followed. Although inequality deepened in the process, a portion of society accumulated wealth, and that wealth, in turn, helped drive economic growth. This was the development path Korea chose.

2. The Collapse of the Real Estate Model: When Growth Turns into Cost

However, this model has now clearly reached its limits. As real estate prices continue to rise, the social costs increase at an exponential rate. Birth rates have fallen to levels that are effectively irreversible, and for younger generations, housing has shifted from a problem that effort can solve to a domain from which they are structurally excluded. Real estate appreciation has entered a phase where it can no longer simultaneously deliver social stability and economic growth.

At this point, a fundamental question emerges. If real estate is no longer an asset to which time can be entrusted, through what assets should Korean society accumulate wealth going forward? This is not merely a matter of investment choice; it is a question about the structure of assets itself.

3. What Real Estate Really Provided: The Forced Accumulation of Time

The true strength of real estate in Korea was never its rate of return. Its real power lay in its ability to force the accumulation of time. High transaction costs, low liquidity, and its integration into daily life made real estate difficult to sell. As a result, most people held property for ten or twenty years regardless of intention. Over that time, inflation accumulated, wages increased, liquidity expanded, and assets grew as a consequence.

Although it appeared speculative on the surface, real estate in practice compelled long-term investment across society. That structure, however, no longer functions. Prices have risen too far, and new entrants cannot even access the opportunity to accumulate time. Once real estate loses its role as an asset that stores time, it can no longer serve as a foundational asset for society.

4. Why the Stock Market Becomes the Only Remaining Alternative

Attention therefore shifts naturally to the stock market. Claiming that equities can fully replace real estate would be an exaggeration. Yet in a post–real estate Korea, it is difficult to deny that the stock market is virtually the only remaining candidate capable of supporting long-term asset accumulation.

Stocks are directly linked to corporate growth, allow participation with relatively small amounts of capital, and offer greater intergenerational mobility. If properly structured, equities too can become assets to which time can be entrusted. The problem is not the concept of equity investment, but the fact that this structure has not yet been fully established in Korea.

5. Why Korean Stocks Became Speculative: A Structural Failure, Not a Personal One

Despite this, many investors continue to distrust the Korean stock market. Weak shareholder returns, repeated disappointments, and the so-called “Korea discount” are the result of collective experience. This is why abandoning Korean equities does not appear to be an emotional decision; based solely on past experience, it seems rational.

Yet in long-term investing, the most dangerous choice is not loss, but leaving a market at the very beginning of structural change. The largest returns in asset markets are generated not when prices rise visibly, but when structures begin to shift. Most investors return only after change has been confirmed, by which point the most critical phase has often already passed.

6. A Market Being Redesigned, Not Abandoned

The Korean stock market today is not disappearing; it is being redesigned. With the real estate–centered asset model reaching its limits, the state cannot afford to neglect the stock market. Corporate financing, asset formation for younger generations, and the sustainability of economic growth all require the stock market to function as core infrastructure.

In this context, recent amendments to commercial law are an important signal. They are not minor legal adjustments, but a statement of the state’s position on how corporate performance should be attributed to shareholders. When combined with discussions on reforming inheritance and comprehensive income taxes, the structural barriers that have long suppressed dividends and discouraged long-term holding are likely to weaken.

7. Institutions Move First, Prices Follow Later

As dividends become more active, equities regain a clear reason to be held, partially restoring the time-accumulation function once provided by real estate. The crucial point is that institutional change always precedes price movements. Markets may not yet believe, but the direction has already shifted.

Expectations toward Korean equities are extremely low, and most negative factors are already reflected in prices. Structural improvements, however, take time to appear in financial metrics. By the time they become visible, the market will likely have moved on to a different stage.

8. Conclusion: Why “Giving Up” May Be the Most Expensive Choice

Choosing to abandon the Korean stock market over the next decade is therefore not simply a matter of giving up returns. It is closer to rejecting the post–real estate path of asset accumulation altogether. This is not about patriotic investing or optimism, but about rational time allocation.

The coming decade will not be defined by explosive asset price growth, but by the reorganization of asset structures. Investors who attempt to bypass this phase and claim only the results will inevitably return too late. In that sense, remaining in the Korean stock market today may not be an aggressive bet, but the most conservative long-term strategy available.

In a Korea that has moved beyond real estate, there are few assets to which time can still be entrusted. And for precisely that reason, investors should not lightly abandon the Korean stock market over the next ten years.