Written by Anna J. Park
Stocks and gold are the most promising medium- to long-term investments for wealthy Koreans, whose sentiment towards real estate investment has turned negative compared to a year ago, according to a new report released by KB Financial Group on Sunday. That’s what it means.
The 2023 Korea Wealthy Report targets 400 wealthy Koreans who each own financial assets and real estate assets worth more than 1 billion won ($766,000) over a three-month period from July to September. Based on detailed research conducted over the years.
According to the report, respondents chose stocks (44 percent) and gold (32 percent) as their preferred investment items for the next three years. Compared to last year, the response rate for equities increased by 13 percentage points and the response rate for gold increased by 5.2 percentage points.
In contrast, the percentage of wealthy people choosing commercial real estate fell 13 percentage points to 25% from 38% last year.
The report states, “As external uncertainties surrounding the international political and economic situation increase due to war, rising interest rates, and inflation, the preference of wealthy South Koreans for more stable assets such as gold and jewelry and individual stocks will further increase.” “It’s getting deeper,” he said.
As of the end of 2022, the number of wealthy people with financial assets of 1 billion won or more is estimated to be approximately 456,000, equivalent to 0.89% of South Korea’s total population. It has increased by 7.5% since the end of 2021.
The main source of accumulated assets was business income (31%), followed by real estate investments (24.5%), inheritance or gifts (20%), financial investments (13.3%), and earned income (11.3%). .
The asset composition is 37.9% financial assets and 56.2% real estate assets. By region, seven out of ten wealthy people live in the Seoul metropolitan area, such as Gyeonggi Province and Incheon.
Total financial assets are estimated to be more than 2,747 trillion won, down 4.7% from last year’s 2,883 trillion won. This is the first time in four years that total financial assets have recorded a decline.
The total real estate assets of wealthy Koreans this year amounted to 2,543 trillion won, an increase of 7.7% from last year’s 2,361 trillion won. However, the year-on-year growth rate was slower than in 2021 and 2022, which each exceeded 10%.