Calls are growing to abolish the weekly apartment sale price statistics, whose credibility came under fire over past data manipulation controversies. Critics say the short compilation cycle can fuel market anxiety.
On the 30th at the National Assembly Members' Office Building in Yeouido, Seoul, such views were raised at a forum on "plans to improve dwelling price statistics," co-hosted by Democratic Party of Korea lawmakers Lee Yeon-hee and Yeom Tae-young, the Korea Housing Association, and the Korea Urban Research Institute. Lee Chang-moo, a professor of urban engineering at Hanyang University, and Choi Eun-young, head of the Korea Urban Research Institute, gave presentations. The moderator was Cho Joo-hyun, an emeritus professor in the real estate department at Konkuk University.
Experts attending the forum unanimously argued that Korea Real Estate Board (REB)'s weekly apartment sale price statistics should be abolished. Since Jan. 2013, the Korea Real Estate Board (REB) has released weekly statistics on apartment sales and jeonse prices. It selects 35,000 households in major apartment complexes nationwide as samples and measures survey prices. If there are no actual transactions within the sample, surveyors assign survey prices using nearby comparable deals or asking prices.
Professor Lee Chang-moo said, "While market quotes are released quickly, they show an outdated market situation with a distorted intensity, which can lead to misjudgment in government policy or social choices," adding, "If it is difficult to abolish it in the short term for policy decisions, it needs to be switched to non-disclosure."
They also pointed out that the gap between the sale price index and the actual transaction price index can cause serious property damage. According to Lee, if a reconstruction apartment that was 600 million won during the Moon Jae-in administration period of 2017–2022 rose to 1.5 billion won, the reconstruction excess profit charge based on actual transaction prices would be 100 million won, and Seoul apartment prices rose 96%. But by the sale price index, the increase is only 26%, making the charge 475 million won. The amount differs more than fourfold depending on the index.
Director Choi Eun-young said, "Even at Eunma Apartment, a reconstruction complex with 4,400 units in Gangnam District, Seoul, there were more than 20 weeks in each of 2020–2022 with not a single weekly sale," adding, "It is like trying to create something unachievable, like an invisible cloak from a fairy tale."
Kim Yong-chang, a professor in the geography department at Seoul National University who joined as a discussant, said, "The Federal Reserve Bank of Dallas in the United States has developed an indicator that signals overheated dwelling prices and is monitoring it," and proposed, "It would also be possible to develop statistics that separate only factors such as sellers' asking prices instead of home prices."
On 4th, just before the presidential election, the Board of Audit and Inspection even released an audit report stating that statistics had been manipulated under the leadership of the Blue House during the Moon Jae-in administration. As a result, concerns have emerged that home price statistics could be exploited for political purposes.
There were also calls to abolish weekly apartment price statistics from private institutions such as KB Kookmin Bank and Real Estate R114. Lee said, "It is also an alternative to consider consulting with private institutions so that weekly indexes are not published."
In response, Yoon Ji-hae, head of the Research Lab at Real Estate R114, said, "As long as there is demand seeking weekly market quotes, new startups will create them," adding, "The argument that the private sector should also halt is unpersuasive."
The Ministry of Land, Infrastructure and Transport said, "We are currently conducting a research project related to advancing the statistics," adding, "We will consider the direction for improvement."