Korea’s richest 1% households had net asset of $2.5 million in 2022

[Photo by Yonhap]

South Korean households with at least 3.28 billion won ($2.5 million) of net asset made up for the country’s top 1 percent with 80 percent of their holdings in real estate and direct financial investments that are double the average.

The wealth of top 1 percent last year increased by 379.2 million won from 2.9 billion won the year earlier, according to an analysis by Yonhap News based on microdata from the 2022 survey on household finances and living conditions conducted by Statistics Korea. The figure has been calculated by listing sample households in the order of highest net worth and weighting each household.

The average wealth of households in the top 1 percent stood at 5.37 billion won, of which real estate assets accounted for 81.4 percent, or 4.37 billion won. That is higher than the 73.7 percent of average real estate assets of the entire households. Financial assets accounted for 16.8 percent at 909.1 million won, of which 84.8 percent, or 763.8 million won, were savings.

Debt owed by the top 1 percent households, in the meantime, was 516.66 million won on average.

The data also shows that 60.3 percent of the top 1 percent households chose savings and financial assets as a means to manage their surplus funds, which is higher than the average 47.9 percent for all households. The most preferred method for financial asset investments was bank deposits at 45.8 percent, followed by direct investments including stocks at 26.5 percent. That is 20.8 percentage points lower and 14.9 percentage points higher than all households, respectively.

On the other hand, 66.6 percent of households in general preferred bank deposits and 11.6 percent direct investments such as stocks. The ratio of indirect investments such as funds was higher among the top 1 percent households at 8.6 percent, compared with 1.7 percent for all households

Only 38.4 percent of the richest were willing to invest their surplus cash in real estate. The number was 58.0 percent for all households.

The most preferred investment among the top 1 percent who are willing to invest in real estate was apartments at 51.8 percent, followed by buildings such as commercial facilities and officetels at 29.9 percent. That was 10.8 percentage points lower and 14.1 percentage points higher than the figures for all households, respectively.

The average annual income of the top 1 percent households was 216.32 million won, 3.4 times the average income of all households. Wage and salary income was 93.28 million won, business income 39.85 million won and property income 72.47 million won. Business income refers to net income from running a business, while property income is earnings from rentals, interests and dividends.

The wage income of the top 1 percent households was 2.3 times higher than that of all households and business income 3.4 times. The average property income of all households was a mere 4.26 million won, 17 times lower than the top 1 percent.