The Korean stock market hits 4900, but South Korean youth are only left to gamble on stocks and cryptocurrencies.

South Korea’s Composite Stock Price Index (KOSPI) broke through the 4900-point mark today. The strong performance of the stock market also reflects social realities: housing costs in Korea are extremely burdensome for young people. A nationwide Daily News survey shows that the proportion of residents living in fragile housing such as exam houses has increased from 5.6% in 2010 to 11.5% in 2023. The Taepo News even pointed out that some young Koreans helplessly said, “Might as well bet on stocks or cryptocurrencies and turn my life around in one shot.”

Samsung and SK Hynix lead the gains, with KOSPI closing higher for 12 consecutive trading days

Recently, South Korea’s stock market has performed strongly, with the KOSPI index closing higher for 12 consecutive trading days, with an accumulated increase of nearly 15% since the beginning of the year. The rally is led by sectors such as transportation equipment, machinery, and construction. Market consensus attributes this to the AI-related demand surge driven by the CES exhibition and humanoid robot themes, with capital continuously flowing into related industries.

Major stocks including Samsung Electronics and SK Hynix have repeatedly hit new highs. Market structure shows that foreign and institutional investors continue to increase their holdings in Korean stocks, while retail investors are net sellers, gradually concentrating market chips in long-term funds.

Bank of Korea: Youth employment delays and rising housing costs

While the stock market performs brilliantly, the Korean youth face structural pressures. The Bank of Korea released a report on the 19th titled “Assessment of the Long-term Impact of Delayed Entry into the Labor Market and Housing Cost Burden on the Young Generation,” which states that although the employment rate of 15-29-year-olds is better than previous generations in macro indicators, their early labor market experiences are significantly prolonged, and their actual situation is not optimistic.

The report analyzes that the preference of companies for immediate-capability recruits, the widespread adoption of on-demand recruitment systems, and the economic slowdown leading to fewer quality job openings are main reasons for extended youth job search periods. The central bank warns that if early career stages remain unemployed for long periods, young people will miss opportunities to accumulate skills and experience, which will affect lifelong employment stability and income levels.

Data shows that those unemployed for 1 year have a 66.1% chance of becoming regular employees after 5 years; if unemployment extends to 3 years, this probability drops to 56.2%. Additionally, each additional year of unemployment reduces current real wages by an average of 6.7%. The central bank also notes that similar phenomena occurred among Japan’s “employment ice age” generation.

Rising rent pressures limit youth asset and education investment space

In addition to employment issues, housing costs for young people are rising rapidly. The report points out that most young people living independently for school or job search purposes rent small-scale non-apartment housing. However, supply of such housing is constrained by rising construction costs and declining investment returns, leading to continuous rent increases.

Statistics show that the proportion of young people living in fragile housing such as exam houses has risen from 5.6% in 2010 to 11.5% in 2023; those living in spaces below the minimum standard (14 square meters) increased from 6.1% in 2023 to 8.2% in 2024, indicating a clear deterioration in overall living quality.

The central bank further points out that rising housing costs not only reduce quality of life but also weaken the accumulation of assets and human capital. A 1% increase in housing expenses correlates with an average 0.04% decrease in total youth assets; each percentage point increase in housing expenditure share results in a 0.18 percentage point decrease in educational expenditure share. The proportion of youth debt within total age group debt has also surged from 23.5% in 2012 to 49.6% in 2024.

Lee Jae-ho, Deputy Head of the Bank of Korea’s Macroeconomic Analysis Team, stated that youth employment and housing issues are no longer individual problems but structural risks constraining overall economic growth potential. He emphasized that only by relaxing rigidities in the labor market, improving employment quality, expanding small housing supply, and alleviating housing supply-demand imbalance can the long-term pressures faced by the younger generation be fundamentally addressed.

This article, “South Korea’s stock market hits 4900, but young Koreans are left betting on stocks and cryptocurrencies,” first appeared on Chain News ABMedia.