The gap between people categorised as South Korea’s wealthiest and the poorest groups has been growing sharply in recent years, with houses, buildings and land owned by the top 20 per cent valued at an average 251 times higher than that owned by the bottom 20 per cent, a report showed on April 5.
The report suggested pandemic-triggered inflation as a key reason behind the widening economic polarisation.
Koreans in the top 20 per cent income bracket had real estate valued at a combined 1.2 billion won ($990,000) on average as of last year, while the bottom 20 per cent’s corresponding figure came to 4.9 million won in the same period, according to Shinhan Bank’s report, based on a survey of 10,000 Koreans aged 20 to 64. The survey was conducted from September to October last year.
Last year, the top 20 per cent of households earned a monthly average of 9.48 million won, fivefold the average monthly income of the bottom 20 per cent of households, which came to 1.81 million won.
The gap between the value of real estate owned by the richest and poorest here has been sharply widening in recent years, with the difference nearly doubling from 125 times in 2018 to 251 times last year.
Real estate also accounted for an average 79.9 per cent of all households’ assets, reflecting its popularity for investment among Koreans. The figure stood at 75.9 per cent in 2018.
Hit by the Covid-19 pandemic, Asia’s fourth-largest economy saw strong income inequality last year as well, with the gap in earnings between the top 20 per cent bracket and the bottom 20 per cent having grown wider. The bottom 20 per cent also saw a decline in their average income year-on-year in 2021, while the top 20 per cent saw a gain.
The top 20 per cent of households saw their average monthly income increase 5.9 per cent year-on-year to 9.48 million won in 2021, while the bottom 20 per cent saw their average income decline slightly from 1.83 million won in 2020 to 1.81 million won last year.
The average monthly income of all Korean households in the survey came to 4.93 million won in 2021, increasing 3.1 per cent year-on-year overall.
The report explained that the average income includes salary, profit from businesses and real estate assets alongside pensions and government support.
On top of that, the report said young Koreans in their 20s and 30s have an average mortgage of 160 million won and it takes 17 years to repay under the condition they pay some 800,000 won a month to the lenders.
The country’s rising real estate prices have affected the terms of repayment, the report noted. Some 57 per cent of respondents in their 20s and 30s said they plan to buy a house in the near future.
For the cost of marriage, respondents aged between 20 and 44 said they spent an average 169 million won to get married. The cost included money to prepare for housing, living, a honeymoon trip and the wedding ceremony.
THE KOREA HERALD/ASIA NEWS NETWORK