Korean households' surplus funds rose by more than 12 trillion won from the previous quarter in the first quarter, according to central bank data. The increase came as incomes rose on the inflow of year-start bonuses, while demand for housing-related funds fell amid a decline in new apartment move-ins. Coupled with a strong domestic stock market, household financial assets swelled by more than 200 trillion won in a single quarter.
According to preliminary "flow of funds" statistics for the first quarter of 2026 released by the Bank of Korea (BOK) on Wednesday, net financial investment by households and nonprofit organizations reached 79.2 trillion won in the first quarter, up 12.2 trillion won from 67 trillion won in the previous quarter. Net financial investment is calculated by subtracting financial liability transactions from financial asset transactions, meaning households invested more money than they spent or borrowed. The BOK explained that household income increased on the inflow of year-start bonuses, while surplus funds grew amid factors including a decline in new apartment move-ins.
New apartment move-ins nationwide totaled 50,000 units in the first quarter, down from 64,000 units in the previous quarter. Over the same period, gross disposable income of households rose 4.5% from the prior quarter, while private consumption fell 0.8%. Although income increased, the pressure for consumption and large housing-related spending eased, leaving households with more money.
The increased household funds flowed into investment assets such as stocks and funds. Households' total financial investment in the first quarter reached 96.3 trillion won, up from 84.3 trillion won in the previous quarter. Of this, investment in equity securities and investment funds was the largest at 61.4 trillion won. Deposits with financial institutions came to 29.4 trillion won. In detail, resident-issued stocks and equity holdings recorded 18.3 trillion won, non-resident-issued stocks 14.5 trillion won, and investment fund shares 28.5 trillion won. In contrast, 7.4 trillion won of bonds were net disposed of.
"Looking at the detailed items of deposits with financial institutions, bank deposits fell while stock deposit accounts rose," a BOK official said. "The characteristic of this household fund flow is that a money move occurred toward stocks." Rather than a simple increase in deposit-type funds, the statistics reflected a shift of household funds into stock market-related funds and stocks and funds.
The stock market rally also had a major impact on the increase in household financial assets. The BOK explained that as the KOSPI rose 19.9% during the first quarter, the valuation of previously held stocks and funds increased significantly. As a result, financial assets of households and nonprofit organizations stood at 6,417.1 trillion won at the end of the first quarter, up 209.4 trillion won from the previous quarter. Financial liabilities rose just 26 trillion won to 2,466.8 trillion won.
As the increase in assets far outpaced the increase in liabilities, indicators of households' financial position also improved. Household net financial assets stood at 3,950.2 trillion won, up 183.5 trillion won from the previous quarter. The ratio of financial assets to financial liabilities rose to 2.60 times, up from 2.54 times in the previous quarter. The ratio of household debt to gross domestic product (GDP) also fell 2.9 percentage points to 85.3% from 88.1% in the previous quarter.
However, whether the decline in the household debt ratio will continue as a trend remains to be seen. Regarding the drop in the household debt-to-GDP ratio, the BOK explained that "the growth rate of household debt stayed at a low level, while the growth rate of nominal GDP exceeded it." Household debt rose just 0.6% in the first quarter, but the ratio fell as nominal GDP grew at a larger pace. The BOK viewed that as housing transactions increased in the second quarter and the balance of household loans at banks also grew, the pace of decline in the household debt ratio could change depending on future housing market and loan trends.
