In South Korea, the number of rich people increased 14.8 percent last year from a year ago on a boom in the housing and equity markets, according to a report by a local financial research institute.
The Korea Wealth Report 2017 released by KB Financial Group Research Institute on Tuesday showed that the number of people who own 1 billion won ($891,000) or more in financial assets per person reached 242,000 in Korea as of 2016, up 14.8 percent from 211,000 in 2015. The number of wealthy people in Korea has been on a rise at an average annual growth rate of 11.4 percent since 2011.
According to the report, 52.2 percent of the rich’s wealth portfolio is made up with property assets, while 44.2 percent financial assets. The figures are up from the previous year’s 51.4 percent and 43.6 percent, respectively, thanks to a boom in the country’s securities and property markets.
Since 2013, the Korean wealthy had reduced the holding of real estate assets, but the trend has reversed early this year thanks to the booming local housing market amid active housing redevelopment projects.
Of their property assets, commercial properties accounted for one third in early 2016, but entering this year, they have shifted their focus to residential buildings, especially apartments that are under reconstruction. Last year, only 13.8 percent of rich people in Korea answered they preferred to invest in apartments, but 36.9 percent of them wanted to make a bet on apartments this year, indicating growing popularity of redeveloped apartments as their investment.
According to the report, 23.6 percent of the wealthy in southern Seoul have already invested in apartments under reconstruction this year, while 21.4 percent for super-rich people with over 10 billion won in financial assets per person. Wealthy people’s appetite for rebuilt apartments is expected to remain strong for a while, survey showed.
According to the report, the total value of financial assets held by the rich people amounted to 552 trillion won as of last year, indicating that only 0.47 percent, or 242,000 people, of the country’s total population control 16.3 percent of the nation’s combined financial assets. The Korean rich own an average of 2.28 billion won per individual.
The total value of properties owned by rich people in Korea also stood at 2.86 billion won as of last year, about 11 times higher than 250 million won, the average value of properties held by average households.
The recent figures indicate that wealth disparity between the wealth and the rest in the country is growing.
By region, 44.2 percent of the wealthy Koreans, or 107,000 individuals, are based in Seoul, followed by 50,000 rich individuals in Gyeonggi (20.8 percent), and 17,000 in Busan (6.9 percent). Inside Seoul, 39,000 individuals live in three most affluent areas in southern Seoul - Gangnam, Seocho, and Songpa.
By Park Yoon-ye
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