South Korea's real estate investors may move their money to the stock market following tough government measures to cool the overheating housing market, analysts said Friday.

In a desperate bid to rein in soaring apartment prices, the government unveiled a package of measures Wednesday, including the designation of areas under close state scrutiny, tougher mortgage rules and heavier capital gains taxes.

The measures also restrict the resell of rights to buy new apartments, which have been cited as a major speculative practice aggravating problems facing regular households.

Some analysts predicted real estate investors may be induced to invest their idle money in stocks as the government measures are tipped to slow down apartment transactions and lead to a drop in the supply of new homes.

"The restriction on the resell of purchase rights will result in decreasing both transactions and apartment prices, making construction companies less active in selling new homes," said Kim Se-chan, an analyst at Daishin Securities Co.

Owners of old apartments will also become less willing to try to rebuild their homes, which may prompt property investors to reconsider where to put their money, he added.

Such investors could also be lured to stocks, buoyed by the recent bull run of the local stock market, another market watcher said.

"The property market has become overheated due to an excessive amount of floating money and concentration of demand in apartments," said Huh Nam-kwon, a fund manager at Shinyoung Asset Management Co. "The demand will inevitably weaken in light of heavier capital gains taxes."

There is a high possibility that money waiting to be invested in the property market will find its way into the stock market, given ultra-low interest rates, he pointed out.

In a July 13 rate-setting meeting, the monetary policy board of the Bank of Korea unanimously voted to keep the key rate at 1.25 percent for the month, extending its wait-and-see approach for the 13th consecutive month.

But other experts stroke a cautious note, saying there is little room for money invested in properties to be shifted to the equity market since both are not considered "replacement assets."

"Real estate and stocks are different investment assets," said Hwang Se-woon, a senior researcher at the Korea Capital Market Institute. "Given that, there is a limited possibility that investment money may flow to the equity market following the anti-speculation measures."

Driven by strong foreign buying, South Korea's stock market has been on a roll, with the benchmark Korea Composite Stock Price Index hitting an all-time high of 2,451.53 on July 24. (Yonhap)