Last Year Land Assets 4.6 Times GDP... "Housing Price Increase Due to Real Estate Concentration"

'2020 National Balance Sheet Results'

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] At the end of last year, the ratio of land assets in South Korea to the Gross Domestic Product (GDP) was recorded at 4.6 times, showing an increase compared to the previous year.

According to the '2019 National Balance Sheet Results (Provisional)' announced on the 21st by the Bank of Korea and Statistics Korea, land assets were 4.6 times the GDP. This ratio had decreased from 4.4 times in 2007 to 4.0 times in 2013 but has been on an upward trend since then. This is because while last year's nominal GDP increased by 1.1%, land assets grew by 6.6%.

The proportion of land assets in the Seoul Capital Area also increased. Although it had been easing due to the launch of Sejong City in 2012 and the development of local innovation cities since 2013, it rose to 56.9% in 2018. This figure is 0.3 percentage points higher than in 2017 (56.6%). The share of land assets in the Seoul Capital Area decreased from 61.7% in 2010 to 56.6% in 2017, then increased to 56.9% in 2018.

A Bank of Korea official said at a briefing that day, "Land assets include not only land but also railways and roads," and added, "The increase in the proportion of land assets in the Seoul Capital Area can be seen as a reflection of the 'smart one-house' phenomenon."

The net assets of households and non-profit organizations, which can gauge total household assets, amounted to 7204.7 trillion won, accounting for 44.9% of total non-financial assets. Looking at the changes in non-financial assets, non-financial assets of non-profit organizations and non-financial corporations increased by 43.81 trillion won and 29.41 trillion won, respectively.

Assets of the general government and financial corporations increased by 21.84 trillion won and 1.48 trillion won, respectively. The share of intellectual property (IP) products also grew. As of the end of 2019, intellectual property products amounted to 522.9 trillion won, representing a ratio of 0.27 times the GDP.

Meanwhile, the ratio of national net assets to GDP rose to 8.7 times, up from 8.2 times a year earlier. The Bank of Korea explained that the increase in the ratio of national net assets to GDP was due to an increase in net external financial assets last year and a rise in the value of non-productive assets centered on land.

This content was produced with the assistance of AI translation services.