“A Couple’s Bonuses Alone Top 1 Billion Won” ... Samsung Electronics and SK Hynix Employees Expected to Move to More Upscale Areas

[Financial News] High performance bonuses at Samsung Electronics and SK Hynix could boost demand for apartments in more upscale areas of Seoul and the greater capital region, according to projections. An analysis suggests that at least 200,000 people—including employees of semiconductor companies, their partner firms, and securities-industry workers—are considering moving to more upscale homes. However, concerns have also been raised that persistent high interest rates could deepen the divide in the real estate market based on buyers’ financial means.
According to the real estate industry on the 20th, Park Jeong-ho, a special appointment professor in the Department of Real Asset Investment Analysis at Myongji University, discussed the effects that performance bonuses at semiconductor companies and changes in interest rates and prices could have on the housing market on the YouTube channel Builnam TV on the 18th.
Professor Park analyzed that as performance bonus payouts in the semiconductor industry have grown, demand for moving to more expensive homes has also increased.
He said, “When you include employees of Samsung Electronics and SK Hynix, their upstream and downstream partner companies, and securities-industry workers who received large bonuses, demand from people seeking to move to premium homes or more upscale areas in Seoul and the greater capital region has reached at least 200,000.”
The explanation is that employees who receive large performance bonuses can afford to buy homes in more upscale areas without taking on much debt. Citing a case he had heard from an industry insider, Professor Park said, “The determination among high-income earners to move into homes they will live in themselves is so firm that one employee who received combined bonuses with their spouse of more than 1 billion won said, ‘It looks like bonuses will be around this level again next year, so I won’t rush and will target a sure thing in a more upscale area.’”

He added, “Even with high interest rates, they have the financial means to reduce their reliance on loans and enter more upscale areas on their own.”
However, he warned that the possibility of further interest rate increases could weigh on the housing market, as rising producer prices may feed into consumer prices with a time lag.
“Because there is a lag before producer-price increases pass through to consumer prices, inflationary pressure is likely to be greater next year,” Professor Park said. “There could be one or two increases in the benchmark interest rate, and even if the war ends, the inflation trend will not turn around immediately.”
He also raised the possibility that financing costs for other companies could increase as investment funds become concentrated in the semiconductor industry.
Professor Park explained, “As top-tier companies such as Samsung Electronics and SK Hynix, along with investment in related infrastructure, absorb a large share of market liquidity, the burden of market interest rates felt by ordinary companies could grow further.”
He predicted that buying demand could vary depending on apartment size even in Gangnam, Seoul. Transactions in large apartments may decline due to tax burdens, while buying demand for small and medium-sized apartments could hold up.
Professor Park predicted, “Transactions in large units in Gangnam may slow because of tax burdens and other factors, but small and medium-sized units will clearly provide a floor, as demand continues from people seeking to downsize within the same area and younger buyers using gifts from their parents to fund their purchases.”
For people looking to buy a home to live in, he recommended reducing their borrowing burden and looking for homes listed for quick sale at discounted prices in more upscale areas.
Professor Park explained, “There are homes put up for quick sale by people who took on too much leverage and could no longer bear the interest payments, and the time will come when funds held on standby after being received as gifts move off the sidelines and enter the market.” He added, “For people buying a home to live in, rather than trying too hard to call the absolute bottom, targeting discounted homes in more upscale areas could be a practical alternative.”


[email protected] Han Seung-gon Reporter