Real Estate: Become Top 1% in 5 Years
- the gap between the wealthiest and average homeowners continues to widen, particularly between metropolitan and non-capital regions.
- The threshold to be in the top 1% of real estate asset holders in South Korea reached 3 billion won last year, an increase of more than 500...
- According to an analysis of the Household Finance Welfare Survey, the baseline for households in the top 1% of real estate assets was 3 billion won last year.
Real Estate Wealth Polarization Intensifies in South Korea
Table of Contents
- Real Estate Wealth Polarization Intensifies in South Korea
- Real Estate Wealth Polarization Intensifies in South Korea
- What is the Threshold to be in the Top 1% of Real Estate Asset holders in South Korea?
- How Much Has the Top 1% Threshold Increased Over Time?
- What Are the Increases for Other Wealth Tiers?
- How Have middle-Income Households Fared?
- What is the Impact of Real Estate Polarization on Net Assets?
- How Does Regional Polarization Manifest?
- Regional Asset Averages
the gap between the wealthiest and average homeowners continues to widen, particularly between metropolitan and non-capital regions.
top 1% threshold Reaches 3 Billion Won
The threshold to be in the top 1% of real estate asset holders in South Korea reached 3 billion won last year, an increase of more than 500 million won in five years. Regional disparities are increasingly apparent, with metropolitan real estate values growing at a faster pace than those in non-capital areas.
According to an analysis of the Household Finance Welfare Survey, the baseline for households in the top 1% of real estate assets was 3 billion won last year. This figure is calculated by ranking households by real estate assets and identifying the value held by the top 1%, weighted by household size. This means that as of last year, one needed to possess at least 3 billion won in real estate to be considered among the wealthiest 1%.
Significant Increase in Top Tier Real Estate Value
Compared to 2019, when the baseline for the top 1% was 2.46 billion won, there has been an increase of 540 million won over five years. Similarly, the baseline for the top 5% rose by 290 million won, from 1.12 billion won in 2019 to 1.41 billion won last year. The top 10% also saw an increase, rising from 750 million won to 950 million won.
Modest Gains for Middle-Income Households
In contrast, real estate assets for middle-income households saw a more modest increase, rising by only 20 million won from 160 million won in 2019 to 180 million won in 2021. This suggests that asset polarization intensified during the real estate boom and subsequent market correction of 2020-2022.
Net asset Disparities Widen
this growing real estate polarization has contributed to a “net asset tendency,” where the average net assets of the wealthiest 10% increased by 470 million won, from 1.53 billion won in 2019 to 2 billion won last year. The market share of this top 10% also increased from 43.3% to 44.4% of total net assets.During the same period, net assets for the next tier also increased, from 640 million won to 840 million won, with their market share rising from 18.2% to 18.6%.
Conversely,the net assets of most households in the second to eighth deciles decreased from 2019 to last year.
Regional Divide Persists
The gap between the metropolitan area and non-capital regions continues to widen. This regional polarization is also evident in the average real estate assets of the top 20%. Last year, the average real estate holdings for households in the top 20% were estimated at 1.3644 billion won in the metropolitan area and 1.07211 billion won in non-capital regions, a difference of approximately 300 million won.
the average real estate value for the top 20% in the metropolitan area increased by 316.7 million won from 1.0477 billion won in 2019 to 1.3644 billion won last year. during the same period, the top 20% in non-capital regions increased by 297.6 million won from 774.51 million won to 1.07211 billion won. The average increase in real estate value in the metropolitan area is significantly higher.
This disparity is attributed to soaring housing prices in Seoul,where education,business,and transportation infrastructure are concentrated.
Regional Asset Averages
In terms of total assets, regions with averages higher than the national average of 542.2 million won were Sejong (766.63 million won),Seoul (766.33 million won), and Gyeonggi (659.45 million won). Daegu and Gyeongbuk had averages of 439.97 million won and 387.37 million won, respectively.
Real Estate Wealth Polarization Intensifies in South Korea
The gap between the wealthiest and average homeowners continues to widen, particularly between metropolitan and non-capital regions.
What is the Threshold to be in the Top 1% of Real Estate Asset holders in South Korea?
The threshold to be in the top 1% of real estate asset holders in South Korea reached 3 billion won last year. This represents a notable increase, highlighting a growing wealth divide within the country.
How Much Has the Top 1% Threshold Increased Over Time?
The baseline for the top 1% of real estate assets in South Korea was 3 billion won last year. Compared to 2019, when the threshold was 2.46 billion won, there’s been a 540 million won increase over five years.
What Are the Increases for Other Wealth Tiers?
The trend of increasing real estate thresholds extends beyond the top 1%:
- Top 5%: Increased by 290 million won, from 1.12 billion won in 2019 to 1.41 billion won last year.
- top 10%: Also saw an increase, rising from 750 million won to 950 million won.
How Have middle-Income Households Fared?
In contrast to the significant gains at the top, middle-income households saw more modest increases:
- Real estate assets rose by only 20 million won from 160 million won in 2019 to 180 million won in 2021.
This suggests that asset polarization intensified during the real estate boom and subsequent market correction.
What is the Impact of Real Estate Polarization on Net Assets?
growing real estate polarization has contributed to a “net asset tendency”:
- Top 10%: Average net assets increased by 470 million won, from 1.53 billion won in 2019 to 2 billion won last year. The market share of this top 10% also increased.
- Next Tier: Net assets for the next tier also increased, with their market share rising.
- remaining Households: Net assets of moast households in the second to eighth deciles decreased from 2019 to last year.
How Does Regional Polarization Manifest?
The gap between metropolitan areas and non-capital regions continues to widen.This regional divide is evident when comparing the average real estate assets of the top 20%:
- Last year, the average real estate holdings for households in the top 20% were estimated at 1.3644 billion won in the metropolitan area and 1.07211 billion won in non-capital regions, a difference of approximately 300 million won.
- The average increase in real estate value in the metropolitan area is significantly higher.
- This disparity is attributed to soaring housing prices in Seoul, where education, business, and transportation infrastructure are concentrated.
Regional Asset Averages
In terms of total assets, the regions with averages higher than the national average (542.2 million won) were:
Here’s a breakdown:
| Region | average Total assets (Million Won) |
|---|---|
| Sejong | 766.63 |
| seoul | 766.33 |
| Gyeonggi | 659.45 |
| Daegu | 439.97 |
| Gyeongbuk | 387.37 |