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Wealthy Koreans, young and old, shift to safe investments: Report

Published: 16 Apr. 2025, 16:57 Updated: 17 Apr. 2025, 16:00

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2477.41 points on April 15, up 21.52 points, or 0.88 percent, from the previous trading session. [YONHAP]

With concerns mounting over prolonged economic slowdown, Korea's wealthy are shifting their investments away from the real estate and into safer assets such as savings deposits, gold and bonds. Younger wealthy individuals in their 40s and under — “young rich” — were found to hold more than three times the amount of virtual assets like Bitcoin compared to the “old rich,” and they also expressed a stronger intention to increase their holdings in foreign stocks.

The “2025 Korean Wealth Report” released Wednesday by Hana Bank’s Hana Institute of Finance said that 74.8 percent of survey respondents holding financial assets worth over 1 billion won ($702,000) expected the domestic economy to worsen this year. The report surveyed 884 high-net-worth individuals.

While most remained passive about adjusting their asset portfolios, among the 34.3 percent who expressed a willingness to make changes, 15.2 percent said they would increase their financial holdings over real estate. That was nearly double the 8.4 percent who said they would do the opposite.

This year, a “recession-type” investment approach favoring stability over returns has become the prevailing strategy. The most preferred investment was bank deposits, cited by 40.4 percent of respondents, followed by gold at 32.2 percent and bonds at 32 percent. Exchange-traded funds (ETFs) came next at 29.2 percent, slightly ahead of stocks at 29 percent. Real estate ranked eighth out of 12 investment categories, with 20.4 percent indicating interest.

Interest in purchasing real estate also fell, with 44 percent of respondents expressing willingness to buy in this year, down from 50 percent last year. The proportion intending to make additional real estate purchases also declined from 49 percent to 42 percent.

Still, the institute noted that this figure remains significantly higher than the general public’s intent to purchase real estate, which stood at 37 percent, indicating that the wealthy “are waiting for the right moment.”

A 50,000 won ($35.06) banknote is seen in front of the Korean national flag. [REUTERS/YONHAP]

Interest in foreign currency assets rose sharply, with 82 percent of respondents saying they plan to hold the asset this year, up from 65 percent the previous year. Investment in foreign stocks in particular surged, with 56 percent indicating intent to invest — nearly triple the 20 percent seen last year. Among wealthy individuals who had invested in foreign stocks in 2024, 12 percent recorded returns of over 20 percent, double the 6 percent return rate of those who had not invested.

Younger wealthy investors were more aggressive in investing in stocks and virtual assets than older investors. About 78 percent of the young rich held stocks, compared to 66.4 percent of the older group. Foreign stocks made up 30 percent of the young rich’s portfolios, compared to 20 percent for the old rich. The younger cohort said they plan to increase that share to 40 percent this year. Additionally, 25 percent of the younger and wealthy said they began investing before reaching adulthood or securing employment.

Virtual asset ownership among the young rich was 29 percent, nearly three times higher than the old rich’s 10 percent.

“The young rich tend to lead investment trends, including virtual assets, and are more inclined to grow their wealth through financial strategies than the old rich,” said Hwang Sun-kyung, a senior researcher at the institute.

Despite acknowledging the risks, wealthy investors continued to express interest in the growth potential of virtual assets. A separate survey of both the affluent and the “mass affluent” — those with assets between 100 million and 1 billion won — showed that the proportion holding virtual assets grew from 12 percent in 2022 to 18 percent in 2024. The average investment in virtual assets was about 42 million won and 34 percent of investors held four or more types of the assets.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY KIM KYUNG-HEE [[email protected]]