Local 2.3% growth rate… housing prices fall, slowing growth
Household net assets per person increased by 4 million won due to stock price increase
Converted to US dollars, it is $187,000, surpassing Japan ($183,000)
Household net assets per household are 578 million won… 22 million won↑
Key Features of the 2023 National Balance Sheet (Source: Bank of Korea) *Resale and DB prohibited
(Seoul = Newsis) Reporter Nam Joo-hyun = Last year, our country’s national net worth (national wealth) was recorded at 2.3039 trillion won. It is 9.6 times the nominal gross domestic product (GDP). It increased by 472 trillion won compared to the previous year, but the increase in national wealth slowed down due to the decline in real estate. The proportion of real estate in household net worth was 75.5% last year, slightly down from the previous year (77.1%).
The net household assets per person increased by about 4 million won from the previous year to 244.27 million won. This is because financial assets increased due to the stock market boom despite the decline in housing prices. As a result, the net household assets per person in dollar terms reached 187,000 dollars, exceeding Japan’s 183,000 dollars.
According to the ‘2023 National Balance Sheet (Preliminary)’ released by the Bank of Korea and Statistics Korea on the 18th, national net assets increased by 472 trillion won (2.1%) from a year ago (22,567 trillion won) to 23,039 trillion won. However, the increase slowed down compared to 2022, when it increased by 688 trillion won (3.1%) due to falling housing prices.
National net worth is an indicator of the net worth of households, non-profit organizations, financial and non-financial corporations, and the general government, and is usually expressed as national wealth. It is usually divided into non-financial assets such as construction assets, facility assets, and land assets, and financial assets such as deposits, cash, and stocks.
Non-financial assets increased from KRW 486 trillion in the previous year to KRW 442 trillion. The continued decline in land assets (-129 trillion → -38 trillion) had a major impact. Net financial assets increased from KRW 202 trillion in 2022 to KRW 30 trillion last year, slowing down the growth rate significantly.
Accordingly, last year, the national net worth decreased from the previous year (9.7 times) to 9.6 times the nominal gross domestic product (GDP) of 2,401 trillion won. The national net worth to nominal GDP ratio was 7.7 times until 2017, then recorded 8.4 times in 2019, and peaked at 9.8 times in 2021.
The slowdown in national net assets is mainly due to non-transaction factors resulting from asset price fluctuations. Net asset acquisitions remained at the previous year’s level (+285 trillion won → +275 trillion won), but nominal holding gains and losses continued at a low level (+45 trillion won → +73 trillion won), and non-transaction increases and decreases in financial assets turned from gains to losses (+178 trillion won → -17 trillion won).
Nominal holding profit and loss remained low due to the continued decline in land prices (-2.1% → -1.3%), and the increase or decrease in non-transactional financial assets turned to a decrease as the impact of domestic and international stock price increases and exchange rate fluctuations was greater in the evaluation profits of non-residents (external financial liabilities) than in the evaluation profits of residents (external financial assets).
As a result, real estate (land + building) assets at the end of last year increased by 1.2% (+207 trillion won) year-on-year to KRW 16,841 trillion, and the share of real estate in non-financial assets decreased from 77.2% to 76.6%. This is the second consecutive year of decline since 2022.
At the end of last year, the housing market capitalization was KRW 6,839 trillion, continuing the downward trend (KRW 118 trillion, -1.7%) following 2022 (KRW 286 trillion, -4.0%), and the ratio to GDP fell from 3.0 to 2.8. Land assets continued the downward trend (KRW 38 trillion, -0.3%) following 2022 (KRW 129 trillion, -1.0%), reaching KRW 1,209.3 trillion, and the ratio to GDP of land assets fell to 5.0 times from the previous year (5.2 times).
However, household net assets increased slightly due to the stock market boom. Last year, household and non-profit organization net assets increased by KRW 210 trillion (1.7%) from the previous year to KRW 12,632 trillion, turning into an increase. In 2022, it decreased by KRW 180 trillion (-1.4%).
This is due to the decrease in non-financial assets (-38 trillion won, -0.4%) centered on housing assets (-147 trillion won, -2.3%), but the increase in financial assets (+233 trillion won, +4.7%) due to the rebound in the domestic stock market. Last year, KOSPI jumped 18.7%.
Looking at the composition of net assets, housing is the largest at 50.3%, followed by real estate other than housing at 25.2%, cash and deposits at 19.1%, and insurance and pensions at 11.5%. The proportion of real estate (housing + non-housing) in the net assets of households and non-profit organizations decreased from 77.1% in 2022 to 75.5% last year.
Accordingly, the household net assets per person at the end of last year were estimated at 244.27 million won, a slight increase (+1.6%) from the previous year (240.39 million won). The household net assets per person are calculated by dividing the net assets of households and non-profit organizations (12,632 trillion won) by the estimated population (approximately 51.71 million people).
The net household assets per person, converted to the market exchange rate (KRW 1,306 per dollar) last year, were $187,000. This is higher than the US ($465,000), Australia ($393,000), Canada ($282,000), France ($230,000), Germany ($224,000), and the UK ($213,000), and higher than Japan ($183,000).
The net assets per household were estimated at 578.55 million won last year, an increase of 21.84 million won (0.5%) from the previous year (575.61 million won). This is the value obtained by dividing the net assets of households and non-profit organizations (12,632 trillion won) by the estimated number of households, which is 21.833 million.
The net assets per household converted to the market exchange rate (KRW 1,306 per dollar) last year is USD 443,000. It is lower than the US (USD 1,185,000), Australia (USD 1,021,000), Canada (USD 683,000), France (USD 498,000), Germany (USD 444,000), and the UK (USD 518,000), but higher than Japan (USD 421,000).
Kim Min-soo, team leader of the National B/S team at the Bank of Korea’s Economic Statistics Bureau, said, “The growth rate of national net worth has slowed significantly since 2022 due to two consecutive years of declines in real estate prices.” He continued, “Since there are differences in the number of people per household by country, it is more advisable to compare net worth per person rather than net worth per household for international comparisons.”
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