Real estate wealth of $2.2 mil. now needed to join Korea's top 1%
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To be in the top 1 percent of real estate holders in South Korea, one must now own property worth more than 3 billion won ($2.2 million), according to newly released government data. That’s a jump of more than 500 million won in just five years, highlighting the growing wealth gap driven by surging home prices followed by recent interest rate hikes.
Data from Statistics Korea’s Household Finance and Welfare Survey showed on Sunday that the threshold to enter the top 1 percent in real estate holdings stood at 3 billion won as of last year. In 2019, the threshold was 2.46 billion won, meaning it has risen by 22 percent (540 million won) in five years.
The bar for the top 5 percent increased from 1.12 billion won to 1.41 billion won over the same period, up 26 percent (290 million won). For the top 10 percent, the minimum asset level rose 27 percent, from 750 million won to 950 million won.
In contrast, the median household — the one in the middle when ranked by real estate holdings — saw its assets grow from 160 million won to 180 million won, only a 13 percent (20 million won) increase.
As real estate remains a dominant component of total household wealth, inequality has widened in terms of net worth as well. The average net assets of the top 10 percent of households rose from 1.53 billion won in 2019 to 2 billion won last year, an increase of 31 percent (470 million won). Those in the next tier, the ninth decile, saw their average net assets grow 31 percent as well, from 640 million won to 840 million won.
The wealthiest 20 percent of households now hold 63 percent of the country’s total net assets, up from 61.5 percent five years ago.
Meanwhile, households in the bottom 10 percent remained in the red, with an average net asset value of minus 6.69 million won last year — an improvement from minus 8.9 million won in 2019, but still in deficit. From the second to the eighth deciles, asset growth ranged from 17 percent to 25 percent, though their share of total net wealth generally declined.
Analysts say the rapid appreciation of home prices, especially in Seoul’s three most affluent districts — Gangnam, Seocho and Songpa — has widened the gap between the capital region and more remote areas. Even within the same brackets, regional disparities in property values were evident.
Households in the top 20 percent (fifth quintile) held an average of 1.36 billion won in real estate assets in the greater Seoul area, compared to 1.07 billion won in other regions — a difference of nearly 300 million won. Since 2019, average real estate holdings increased by 310 million won in the capital area and 210 million won in remote regions.
This article from the Hankook Ilbo, the sister publication of The Korea Times, is translated by a generative AI system and edited by The Korea Times.