Wealthy Koreans see their assets surge in value during pandemic

Wealthy Koreans see their assets surge in value during pandemic

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Increase in real estate prices is cited as main reason behind rising asset values

By Anna J. Park

High-income earners in the top 10 percent to 30 percent of the wage bracket saw the value of their assets surge by nearly 150 million won ($126,000) on average over the past year even as the coronavirus pandemic wreaked havoc on the economy, according to a survey published Sunday.

Conducted by Woori Finance Research Institute (WFRI) on 4,000 individuals nationwide who fell into the targeted range, the survey showed their average net assets amounted to 913 million won between September and October, up from 764 million won in 2020.

The surveyed individuals can be classified as “mass affluent,” which refers to people who still work for a living, but have more money saved up than most households and have significant purchasing power.

Their annual income prior to taxation was between 70 million won and 120 million won.

The main reason behind the increase in average asset value was a rise in the value their real estate holdings in the midst of surging residential property prices here.

The average price tag of their real estate holdings jumped 18.8 percent or 141 million won from the previous year to 750 million won in 2021.

About 10 percent of the respondents said the value of their real estate holdings jumped by more than 500 million won in a year. Only 6.8 percent of the respondents said the price of their real estate holdings decreased compared to last year.

“The proportion of real estate increased to 78.7 percent, up 2.1 percentage points from last year. This shows an aggravation of the bracket’s slanted tendency towards real estate assets,” an official from the WFRI pointed out.

Their average financial assets ― non-real estate holdings ― accounted for around 15 percent their total wealth, standing at 120 million won, decreasing by around 5 million won from the previous year.

Yet a third of the respondents said their earnings generated from financial investments had increased. Those who own stocks saw the value of their equity holdings soar by 48.3 percent. On average, they owned 33 million won worth of stocks.

The finance research institute also said that a higher percentage of people in the top 10 percent to 30 percent of the income bracket became more aggressive in seeking higher returns on their investments.

A total of 43.6 percent of the respondents said they proactively seek higher returns and higher risks in their investments, up around 10 percentage points from the previous year. Also, one in five of them said they are investing in cryptocurrencies and parked an average of 20 million won into those investments.

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