The threshold for the top 1% of real estate wealth holders surged 400 million won in just one year to reach 3.4 billion won ($2.5 million), new data shows. The jump comes as Seoul apartment prices posted their largest annual increase in 19 years last year, with the Gangnam area leading the rally. While property values for the wealthiest households soared, real estate assets for middle-income and non-capital region households actually declined, widening the wealth gap further.
An analysis of microdata from the National Data Center's Household Finance and Welfare Survey by The Seoul Economic Daily found that the threshold separating the top 1% of real estate asset holders (based on actual transaction prices) reached 3.4 billion won last year, up 400 million won from the previous year. This threshold had increased by approximately 540 million won over the five years from 2019 to 2024, meaning last year's single-year surge nearly matched the entire five-year gain. The spike is attributed to rapidly rising property prices in the Seoul metropolitan area, with already expensive apartments in Gangnam and along the Han River belt posting even sharper increases.
Similar trends were observed among the top 10% of real estate asset holders. The threshold for the top 5% rose to 1.51 billion won, up 100 million won from 1.41 billion won the previous year. The top 10% threshold also increased by 40 million won to 990 million won.
In contrast, real estate assets for median households fell to 170 million won last year from 180 million won the year before, a decline of 10 million won. The asset gap between wealthy property owners and middle-income households has widened further.
Housing price polarization is intensifying even within Seoul. According to KB Real Estate, the quintile ratio for Seoul apartments reached 6.9 in December last year. The quintile ratio is calculated by dividing the average price of the top 20% (fifth quintile) by the average price of the bottom 20% (first quintile). Since data collection began in 2008, this ratio had consistently ranged between 4 and 5 before exceeding 6 for the first time last year. A higher ratio indicates more severe polarization.
The gap between the capital region and non-capital regions is also deepening. Last year, the average real estate holdings of households in the top 20% by net assets in the capital region reached 1.5 billion won, up approximately 130 million won from about 1.37 billion won the previous year. The average property value for the capital region's top 20% had gradually risen from 1.05 billion won in 2019 to 1.12 billion won in 2020 and 1.29 billion won in 2021, before peaking at 1.42 billion won in 2022 amid the COVID-19 era asset price surge. After fluctuating through 2024, it set a new record high last year.
Meanwhile, the average real estate value for top 20% households in non-capital regions fell to 1.04 billion won, down 30 million won from 1.07 billion won a year earlier. Property values for the non-capital region's top 20% had risen from 860 million won in 2019 to 900 million won in 2020 and exceeded 1 billion won in 2021. After breaking through 1.13 billion won in 2022, values have struggled to recover their previous peak.
As a result, the asset gap between capital and non-capital regions has widened from 300 million won to 460 million won. While assets for the capital region's top 20% increased by approximately 400 million won over the past five years, non-capital regions saw gains of only about 100 million won.
"Demand is concentrated in universally desirable areas such as Gangnam's three districts and apartments along the Han River belt, but supply is insufficient, so high-end apartment prices are expected to rise further," said Kwon Dae-joong, distinguished professor of economics and real estate at Hansung University. "Currently, only mortgage lending has been restricted while liquidity continues to flow into the market, so polarization is likely to intensify going forward."