Property tops assets list
The findings were reported yesterday in the nation’s first balance sheet, released by the central bank and Statistics Korea.
The balance sheet showed that national net assets increased from 10.2 quadrillion won at the end of 2011, largely thanks to nonfinancial assets.
At the end of 2012, nonfinancial assets amounted to 10.7 quadrillion won, whereas net financial assets, which subtracts financial debt, amounted to negative 101.1 trillion won.
Total national assets were 7.7 times the nation’s gross domestic product, which is larger than other developed economies such as Japan, whose national assets are 6.4 times larger than its GDP, and France, whose assets are 6.7 times larger.
In breaking down the assets, those owned by households and nonprofit organizations accounted for 57 percent or 6,056.7 trillion won, followed by the government’s 25.7 percent or 2,736 trillion won worth of assets. Nonfinancial companies accounted for 14.3 percent while financial companies’ asset made up less than 3 percent of the total assets.
The average net assets of a Korean household with four members at the end of 2012, which was the same for nonprofit organizations, was $571,000. This is roughly 63 percent that of U.S. households, which have an average of $902,000.
However, while nonfinancial assets in U.S. households and nonprofit organizations make up 30 percent, Korea’s accounts for 66 percent.
Every 10 years since 1968, the government attempted to create a national balance sheet of five to six institutions, including the Bank of Korea, Korea Development Bank and Industrial Bank of Korea.
But in 1998, the creation of the balance sheet took a new trajectory when the study, which was conducted by field surveys and phone calls, became too much of a financial burden.
Since 1998, Statistics Korea has announced rough estimates on national assets based on the previous year’s studies, resulting in inaccurate figures.
In the last attempt at a national asset study, Statistics Korea estimated that property made up 44.8 percent of nonfinancial assets. But yesterday’s study showed a higher ratio of 55.2 percent, or 5,604.8 trillion won.
Property holdings have risen because in previous studies, property values were based on the government’s estimates, while the latest study has factored in market price, which is tyically higher than the assessed value.
The study showed that the government’s land ownership was higher than in other economies. Land owned by the government accounted for nearly 22 percent of total nonfinancial assets. The central bank reported that this was higher than France, Japan and Canada, where government land ownership was less than 10 percent.
The central bank said the study could lead to policies for sustainable growth and a more even distribution of wealth and resources.
BY lee ho-jeong [firstname.lastname@example.org]