There is a noticeable trend among high-net-worth individuals favoring apartments over commercial real estate such as shopping centers and buildings as investment options. They have determined that investing in apartments in Seoul, where a supply shortage is expected, is better than commercial real estate, which has vacancy risks.
According to the '2025 Real Estate Report' published by KB Financial Group's Management Research Institute on the 28th, a survey conducted last year targeting private bankers (PB) showed that the preference for regular apartments among high-net-worth individuals was the highest at 35%. Reconstruction apartments ranked second at 29%. This was followed by shopping centers at 20%, office buildings at 8%, and land at 6%.
The interest of high-net-worth individuals in regular apartments and reconstruction apartments has been steadily increasing since 2021. In 2022, the preference for regular apartments was 29% and 20% for reconstruction apartments, but by 2023, these figures had risen to 33% and 26%, respectively, showing an upward trend last year as well.
Conversely, the preference of high-net-worth individuals for commercial real estate, which was highlighted as an investment asset during the real estate market boom, continues to decline. In 2022, the preferences for shopping centers and office buildings were 33% and 11%, respectively, but in 2023, these dropped to 22% and 10%.
The phenomenon of high-net-worth individuals preferring to invest in apartments stems from the belief that purchasing a 'smart single unit' in a core location in Seoul, where a supply shortage is expected, is more advantageous than holding shopping centers or office buildings that may experience vacancies.
A researcher at KB Management Institute noted, 'High-net-worth individuals have a relatively high preference for investing in Seoul, especially in the Gangnam area,' adding that 'it is because their financial capacity is greater, making the burden of additional contributions lower even if they invest in reconstruction apartments.'
Park Won-gap, a chief real estate specialist at KB Kookmin Bank, said, 'The intense domestic economic downturn is increasing vacancies, reducing the attractiveness of building investments,' and added, 'With rental yields low, there could be negative margins if interest on loans is paid, so demand for buildings is shifting to high-end apartments in Gangnam.'