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Korean households put far more wealth in nonfinancial assets than U.S., Japan or Britain

Published: 08 Dec. 2025, 19:05

Apartment complexes in Seoul are seen from Namhansanseong Fortress in Gwangju, Gyeonggi on Oct. 15. [NEWS1]

Korean households put far more of their wealth into nonfinancial assets such as real estate than households in the United States, Japan or Britain, according to a report released Monday, underscoring concerns that capital is flowing disproportionately into property instead of financial markets.

Nonfinancial assets accounted for 64.5 percent of household wealth in Korea in 2024, the Federation of Korean Industries (FKI) said, citing research by Song Heon-jae, an economics professor at the University of Seoul. The report compared the figure with 32 percent in the United States and 36.4 percent in Japan, both as of 2023, and 51.6 percent in Britain.

The report also found that Korean households were heavily reliant on cash-equivalent financial assets. The share of cash and deposits increased from 43.4 percent in 2020 to 46.3 percent in 2024, while the proportion of investment-related assets — such as stocks, bonds and derivatives — decreased from 25.1 percent to 24 percent during the same period.

In contrast, the United States displayed the opposite pattern. Cash and deposits made up only 14.7 percent of American households’ financial assets, while investment-related assets accounted for 56.1 percent.

Property notices are seen on a bulletin board outside a real estate office in Songpa District, southern Seoul on Dec. 7. [NEWS1]

The FKI noted that household financial investment in the United States had grown further in recent years amid booming asset markets.

The report urged Korea to reduce its heavy concentration in nonfinancial assets and to promote financial investment.

One recommendation was to simplify Korea’s complex dividend and capital gains tax structures, which currently operate under a multilayered tax rate system. In the long term, the report suggested introducing a unified flat tax rate on overall financial income — encompassing interest, dividends and capital gains from stock transactions.

To encourage long-term investment, the report proposed reintroducing long-term investment funds that were previously eligible for income tax deductions. It also recommended allowing deductions for losses on financial investment products held for more than 10 years.

Apartment complexes in Seoul are seen from an observation deck in Songpa District, southern Seoul on Nov. 30. [NEWS1]

With financial education scheduled to become an elective high school subject next year, the report also called for expanding such education to elementary school students.

It emphasized the need for a systematic curriculum covering prevention of financial fraud, how to respond to scams and the basics of financial investing.

“The excessive concentration of household wealth in real estate is limiting the flow of funds into productive sectors such as corporate investment,” said Lee Sang-ho, director of economic and industrial policy at the FKI. “We need to foster a financial investment culture that promotes a virtuous cycle of corporate growth and household asset expansion.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY NA SANG-HYEON [[email protected]]