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| gettyimagesbank |
By Yi Whan-woo
The super-rich in Korea favor art as a form of investment more than less wealthy groups of people, according to a report, Sunday.
Released by Hana Institute of Finance, the "2023 Korea Wealth Report" defined the super-rich as people whose financial assets, such as stocks and bonds, exceed 10 billion won ($7.58 million) in value, or those whose aggregate wealth is worth at least 30 billion won.
The report showed that 41 percent of the super-rich spent money to buy 1 billion won worth of artworks, compared to 23 percent of those who are classified as rich and 14 percent of people who fall into the upper-middle wealth bracket.
One out of every two super-rich people was willing to buy more artworks in the future.
The finding is in line with multiple studies in and outside Korea that the rich are spending increasingly on art and that the number of loan businesses accepting artworks as collateral is expanding.
The report said the aggregate wealth of the super-rich averaged 32.3 billion won in 2022, while financial assets accounted for 50 percent, real estate 48 percent and artworks 2 percent.
Also, 60 percent of their financial assets was cash, including bank deposits, in 2022 when the key interest rate increased sharply amid high inflation and economic unrest.
"It can be said the super-rich believe that cash is king at a time of growing economic uncertainties," the report said.
Some 73 percent of the super-rich responded that they partly own cash in foreign currencies, as compared to 64 percent of those in the upper-middle bracket.
"It appears the more wealthy they are, the more they spent on foreign currencies, especially on the U.S. dollar, in 2022 when the greenback strengthened against other major currencies due to a growing preference for safe haven assets worldwide," the report said.
In terms of their financial investments, 70 percent of the super-rich said they reaped profits.
Asked whether they are interested in buying real estate in 2023, 49 percent of the super-rich said "yes," while 51 percent said "no."
Those who are interested in real estate said they prefer to buy commercial buildings worth 5 billion won or more and also apartments with an area of 132 square meters, which is considered spacious in Korea.
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