[비즈한국] As the South Korean economy shows a K-shaped recovery due to the advancement of artificial intelligence (AI), the government has set the resolution of polarization as a key strategy for economic growth in the second half of this year. This is because deepening polarization not only diminishes the nation's overall growth potential but also undermines social integration. However, as the K-shaped polarization that began with the semiconductor sector combines with a sharp rise in real estate prices, it appears that transfer income for the highest-income bracket has surged by the largest margin in 7 years.
The analysis suggests that this rapid increase in transfer income is occurring because high-income earners, who were the first to benefit from the warmth of the economic recovery, have increased inheritance and gifts to their children as buying homes has become more difficult due to recent real estate price hikes and mortgage loan regulations.
President Lee Jae-myung has expressed concern over the "K-shaped polarization" phenomenon on numerous occasions, presenting the real estate issue as one of the tasks to be resolved. During his opening remarks at a Cabinet meeting held at the Blue House on July 21, President Lee stated, "Economic indicators are improving at a truly surprising rate," but pointed out the polarization problem, saying, "The problem is that, contrary to this, countless small and medium-sized enterprises, small business owners, and young people are being alienated from the warmth of this growth."
President Lee emphasized, "Real estate stability is one of the most important prerequisites for mitigating polarization," and added, "Only by normalizing the real estate issue can productive reinvestment of resources be possible, social dynamism be restored, and a breakthrough found for conflicts caused by polarization." He was expressing his intention that real estate prices must be brought under control, as wealth polarization is deepening due to rising property prices.
On July 23, at a public debate on real estate policy, President Lee again pointed to the issue of wealth concentration due to real estate, clarifying his will to resolve real estate problems by strengthening holding taxes. President Lee said, "Naturally, there should be a distinction between owning (a house) to actually live in and owning multiple properties to make money," adding, "If we had normalized real estate holding taxes in the past, (home prices) would not have risen this much."
However, critics point out that the various real estate regulatory policies that President Lee has been accelerating to resolve polarization are actually worsening it. This is because, while the transfer income of households in the bottom 10% of income (the first quintile) remained stagnant in the first quarter of this year, the transfer income of households in the top 10% (the tenth quintile) surged. Unlike general income received in exchange for participating in economic activities, transfer income refers to money received through inheritance or gifts from other households, or income received for free from the government or non-profit organizations.
In the first quarter of this year, the average monthly transfer income of tenth-quintile households was 1,585,987 won, a 35.2% increase compared to a year ago (1,172,665 won). This is the largest increase since the relevant statistics were reorganized in 2019. The transfer income of tenth-quintile households was 914,703 won in 2023 (first-quarter basis), down 8.8% from 2022 (1,003,171 won), and then increased by 11.5% to 1,019,724 won in 2024. It subsequently grew by 15.0% to 1,172,655 won in 2025 before skyrocketing this year.
Unlike the significant increase in transfer income for tenth-quintile households this year, the transfer income for first-quintile households has remained virtually flat. In the first quarter of this year, the average monthly transfer income for first-quintile households was 580,267 won, an increase of only 0.2% compared to the same period last year (578,952 won). Since a significant portion of transfer income for first-quintile households consists of subsidies, insurance payouts, unemployment benefits, and livelihood support provided by the government and local authorities, there was little room for growth.
The surge in transfer income for tenth-quintile households is interpreted as a result of increased inheritance or gifts, as the government has tightened financial access related to real estate, such as mortgage regulations, to curb rapidly rising real estate prices this year. According to financing plan data submitted by the Ministry of Land, Infrastructure and Transport to People Power Party lawmaker Kim Jong-yang, funds prepared through gifts and inheritance among housing acquisition funds from January to April this year totaled approximately 3.6 trillion won. In just four months, it has exceeded half of last year's annual total of 6.5 trillion won. In short, such increased gifts and inheritance for real estate acquisition are taking place among high-income earners.