South Korea’s wealthy pick real estate as top long-term investment choice

SEOUL (The Korea Herald/ANN) – South Korea’s wealthy are picking real estate as their best long-term investment option amid the widespread bearish sentiments, a report released by a major financial group showed yesterday.

The report, based on a survey conducted by a think tank under KB Financial Group, involved 400 South Korean high net worth individuals or investors with assets of more than one billion won (USD833,000). Of the total respondents, only 10 per cent said they seek to expand the scope and size of their asset portfolio this year, reflecting the sluggish economy and stock markets weighed down by the ongoing United States (US)-China trade war coupled with the economic dispute between South Korea and Japan.

Among the types of investments the avid investors seek to expand, 61.6 per cent or the majority chose real estate as their preferred long-term investment option.

Nearly 35 per cent said they saw investment in financial assets including bonds and stocks as a viable option.

The remaining 3.3 per cent chose other types of investments, including gold. Among types of real estate investments, 21.5 per cent of the respondents chose commercial real estate – involving non-residential properties such as stores or office buildings – as their preferred option. The figures show that the nation’s wealthy have become more reluctant to make aggressive investments, the report noted, with the corresponding figures for the data released last year relatively higher.

Analysts at KB cited the risks stemming from the ongoing trade disputes and a real estate market slowdown affected by the government’s announcement of measures that intend to stabilise the market, including price and loan regulations.

Regarding interests, 53.9 per cent of individuals with more than five billion won net worth chose overseas properties as the investment type they were currently “most interest in”.

About 54 per cent of them with a net worth ranging from one billion won to five billion won also showed their interest in investing in foreign real estate market.

Vietnam ranked No 1 in terms of the most popular overseas markets with 57.1 per cent.

Singapore, China and Malaysia followed with 32.1 per cent, 30.7 per cent and 26.4 per cent.Overall, the number of the wealthy last year increased 4.4 per cent, on-year, to stand at 323,000, compared with 310,000 in 2017.