First Decline in Average Asset Statistics Since Last Year... 4% Decrease Compared to Previous Year Due to Falling House Prices

Average Household Assets 527.27 Million KRW
Statistics Korea, Financial Supervisory Service, Bank of Korea Announce '2022 Household Financial Welfare Survey'

Last year, the average household assets decreased by about 4% compared to the previous year. This was due to the decline in asset prices following the downturn in the real estate market. However, with improvements in the economy and employment conditions, income increased across all quintiles. The average household income recorded 67.62 million KRW, a 4.5% increase from the previous year.

According to the "2022 Household Finance and Welfare Survey" released on the 7th by Statistics Korea, the Financial Supervisory Service, and the Bank of Korea, the average household assets as of the end of March stood at 527.27 million KRW, a 3.7% decrease from the previous year. This marks the first decline since the statistics began in 2012. However, Statistics Korea explained that the base effect of the high asset growth rates in 2021 and 2022 should be taken into account. Net assets, calculated by subtracting liabilities from assets, were 435.4 million KRW, down 4.5% from the previous year.

The main cause of the asset decline was the impact of the real estate market downturn. While financial assets continued to increase, tangible assets significantly decreased due to falling real estate prices. Financial assets, which account for about 24% of household assets, rose by 3.8% to 125.87 million KRW compared to the previous year. On the other hand, tangible assets, mostly consisting of real estate and accounting for about 76%, decreased by 5.9% to 401.4 million KRW.

With improvements in the economy and employment conditions, the average household income increased by 4.5%. In 2022, the average household income was 67.62 million KRW, up 4.5% from the previous year. Disposable income, which is income after deducting non-consumption expenditures, also increased by 3.7% to 54.82 million KRW. Notably, income increased across all quintiles. Although public transfer income decreased by 4.8% due to the end of government support related to COVID-19, earned income rose by 6.4% with improved employment conditions, and business income also increased by 4.0%.

The Gini coefficient, which indicates inequality (based on equivalized disposable income), improved by 0.005 to 0.324 compared to 0.329 the previous year. The Gini coefficient is a representative indicator of income inequality, where 0 means perfect equality and 1 means perfect inequality. However, the relative poverty rate slightly worsened to 14.9% from 14.8% the previous year. The effect of distribution improvement due to government policies also slightly declined compared to the previous year.