Net National Assets Surpass 2,400 Trillion Won for the First Time
Driven by Increases in Both Financial and Non-Financial Assets
Seoul Metropolitan Area Leads Growth in Housing Market Value
According to the “2024 National Balance Sheet (provisional)” released by the Bank of Korea and Statistics Korea on July 17, net national assets stood at 2,410.5 trillion won at the end of last year, up 5.3% (121.7 trillion won) from the previous year. The increase was much larger than the previous year’s rise of 29.4 trillion won (1.3%). This was due to a significant increase in both non-financial assets (from 27.1 trillion won to 63.5 trillion won) and net financial assets (from 2.4 trillion won to 58.2 trillion won).
The ratio of net national assets to nominal Gross Domestic Product (GDP) was 9.4 times, down from 9.5 times the previous year. This was because nominal GDP grew faster than net national assets. Last year, the nominal GDP growth rate was 6.2%, outpacing the 5.3% growth rate of net national assets.
The expansion in net national assets was largely driven by non-transactional factors such as asset price increases. Nam Minho, head of the National B/S Team at the Bank of Korea, explained, “Among non-transactional factors, the nominal holding gains on non-financial assets and the non-transactional changes in financial assets both shifted from decreases of 6.7 trillion won and 1.9 trillion won, respectively, in the previous year, to sharp increases of 5.2 trillion won and 46.5 trillion won last year.” For non-financial assets, land prices turned to a 1.2% increase, and the price growth of productive assets also expanded to 2.1%. Non-transactional changes in financial assets increased due to the strong performance of overseas stock markets and a rise in exchange rates.
At the end of last year, net financial assets reached a record high. Financial assets (142.8 trillion won) grew much more than financial liabilities (84.6 trillion won), resulting in a year-on-year increase of 58.2 trillion won (56.0%).
The growth in financial assets was led mainly by cash and deposits (25.8 trillion won, 5.3%) and insurance and pensions (12.8 trillion won, 8.3%). Financial liabilities, despite increases in cash and deposits and insurance and pensions, saw a reduced increase compared to the previous year due to a decline in equity securities and investment funds (-13.7 trillion won, -2.9%).
Breaking down last year’s increase in net financial assets into net acquisition (transactional factors) and non-transactional changes, non-transactional changes surged to 46.5 trillion won, a sharp turnaround from the previous year’s -1.9 trillion won. The increase in net acquisition also expanded from 4.3 trillion won to 11.7 trillion won. Nam explained, “The sharp rise in non-transactional changes was due to valuation gains in external financial assets (held by residents) outpacing those in external financial liabilities (held by non-residents), driven by strong overseas stock markets and rising exchange rates.”
At the end of 2024, the net assets of households and nonprofit institutions totaled 1,306.8 trillion won, up 424 trillion won (3.4%) from the previous year-end. This was a larger increase compared to the previous year’s rise of 219 trillion won (1.8%). Non-financial assets, led by housing assets (264 trillion won, 4.1%), increased by 215 trillion won (2.2%). Financial assets, mainly cash and deposits (122 trillion won, 5.1%) and insurance and pensions (121 trillion won, 8.3%), rose by 263 trillion won (5.1%). In terms of net asset composition, housing accounted for the largest share at 50.9%, followed by non-housing real estate (23.7%), cash and deposits (19.4%), and insurance and pensions (12.1%). At the end of 2024, the proportion of real estate in net assets was 74.6%, down from 75.4% at the previous year-end.
The per capita net household assets at the end of 2024 were estimated at 252.51 million won. The increase rate was 3.3%, higher than the previous year’s 244.5 million won (1.7%). Converted at the market exchange rate (1,363 won per dollar in 2024), per capita net household assets amounted to about $185,000. Compared to major countries, this is lower than the United States ($521,000), Australia ($401,000), Canada ($295,000), Germany ($249,000), France ($230,000), and the United Kingdom ($206,000), but higher than Japan ($180,000) (for Australia, Germany, France, the UK, and Japan, based on end-2023 net assets and 2023 exchange rates). Using the purchasing power parity exchange rate (933 won per dollar in 2024), per capita net household assets were $271,000, higher than the UK ($233,000) and Japan ($248,000).
The proportion of real estate assets declined. At the end of 2024, real estate assets increased by 431 trillion won (2.6%) year-on-year to 1,716.5 trillion won, but their share of non-financial assets (76.3%) fell by 0.3 percentage points compared to the previous year-end (76.6%). Land assets (1,213.9 trillion won) turned to an increase (2.1%), while the growth rate of building assets (502.5 trillion won) slowed from 4.9% to 3.8%.
Meanwhile, the market capitalization of housing (715.8 trillion won) rebounded after two consecutive years of decline, driven by rising housing prices. Its share of non-financial assets (31.8%) increased compared to the previous year-end (31.4%).
The market capitalization of housing increased mainly in the Seoul metropolitan area. As of the end of 2024, the total market capitalization of housing nationwide was estimated at 715.8 trillion won. By region, Seoul had the largest share (249.8 trillion won, 34.9%), followed by Gyeonggi (207.5 trillion won, 29.0%), Busan (39.0 trillion won, 5.4%), and Incheon (34.1 trillion won, 4.8%). Nam explained, “Looking at the share of each region’s housing market capitalization relative to the national total, the metropolitan area’s share increased from 67.7% at the end of 2023 to 68.7% at the end of 2024, continuing its upward trend.” He added, “In terms of the regional contribution to the national growth rate (4.2%), the metropolitan area accounted for 3.8 percentage points, while non-metropolitan areas contributed 0.4 percentage points, meaning the metropolitan area overwhelmingly dominated with a 90.6% contribution rate.”
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