Real Estate vs Stocks: A Realistic 2026 Assessment

My Lease Is Expiring

My jeonse (lump-sum deposit lease) expires next March. The current deposit is 270 million won, and renewal would bump it 5% to 283.5 million. The question I started wrestling with: keep tying up this money in a lease, or switch to monthly rent and invest the difference?

Ask around and you get two camps: "Buy property, always buy property" vs "Seoul housing prices are a bubble, put it in stocks." Both are supremely confident but vaguely supported.

I decided to run my own numbers.

Real Estate: An Honest Calculation

A 30-pyeong (roughly 1,000 sq ft) apartment in Seoul's outskirts goes for about 600-800 million won. My seed money including the lease deposit is around 320 million. To buy a 600M apartment, I'd need a 280M mortgage. At 3.7% interest, monthly interest alone is 860,000 won.

That's just interest. With a 30-year amortizing loan, monthly payments hit 1.29 million. Add 150K maintenance fees, property tax, and repair costs, and total housing costs exceed 1.6 million per month.

Switching to monthly rent would cost about 1 million. That's a 600K difference. What if I invested that 600K?

But real estate's appeal is leverage. Controlling a 600M asset with 320M means if property prices rise 10%, your effective return is 18.75%. It's a double-edged sword since you're investing with borrowed money.

Stocks: S&P 500 Basis

The S&P 500 has historically returned about 10% annually. After inflation, roughly 7%. Investing 600K monthly at 7% compounding for 20 years yields approximately 310 million won. Principal 144M, gains 166M.

Meanwhile, a 600M apartment appreciating at 3% annually is worth 1.08 billion in 20 years. After paying off the mortgage, net worth is around 800M. Of course, the owner-occupancy value makes direct comparison tricky.

But Korean stocks are a different story. KOSPI's 20-year returns are dismal. Compare it to the S&P 500 and you'll want to cry. Korean stocks vs Korean real estate -- real estate won by a landslide. (That's a somewhat sad reality.)

What I'd Been Missing

Taxes. Real estate has acquisition tax, property tax, and capital gains tax. Stocks have capital gains tax. Simple return comparisons make it easy to forget taxes, but real returns should always be calculated after tax.

As of 2026, foreign stock capital gains above 2.5 million won are taxed at 22%. Real estate capital gains tax varies by holding period -- 2+ years gets the standard rate. A single-home owner-occupant gets tax-exempt status.

When you factor in taxes, the tax benefits of an owner-occupied single home are substantial. Comparing raw returns without accounting for this is a half-baked analysis.

There's No Right Answer

I sat down to write a conclusion but couldn't reach one. Real estate has leverage, owner-occupancy value, and tax benefits going for it, with liquidity as the drawback. Stocks have liquidity going for them, with volatility as the cost of entry.

"Which is better" depends on timing, personal circumstances, and interest rates. Someone who bought a Seoul apartment in 2020 looks like a genius. Someone who went all-in on KOSPI in 2022 still hasn't broken even. But nobody knows the future.

My Current Decision

When the lease expires, I'm renewing for now. I'm not ready to buy. With 60% of my seed money locked in the lease deposit, there isn't much investment room anyway.

With what's left, I started putting 500K per month into an S&P 500 ETF. Not a grand strategy -- just a "let's start somewhere" mindset. In 2-3 years, once I've built up more capital, I'll revisit the real estate question. But who knows where housing prices will be by then.