The government has been in its second year of reviewing an overhaul of the Korea Real Estate Board (REB)'s weekly apartment price trend statistics. Since the second half of last year, lawmakers from the Democratic Party of Korea have raised controversy that the data fueled speculation and were distorted, and Minister Kim Yun-duk of the Ministry of Land, Infrastructure and Transport also said a reform would be pursued, but no conclusion has been reached yet.
Controversy over the Korea Real Estate Board (REB)'s statistics spread six years ago in 2020 after then Land Minister Kim Hyun-mee cited the data and said, "Home prices rose 11%," with critics saying the figures diverged widely from market prices. The subsequent debate over statistical manipulation led to an investigation by the Board of Audit and Inspection, an indictment by prosecutors, and a trial, with the first-instance hearing still underway. Some say all transactions that form the sample should be disclosed to restore confidence in the statistics.
◇ Government adrift, still "reviewing" reform
According to the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Board (REB) on the 20th, the government is continuing a review to overhaul the REB's "weekly apartment price trends" statistics released every week. In Sept.–Oct. last year, Democratic Party of Korea lawmakers labeled them a cause of speculation and market distortion and called for abolition, but whether to abolish or maintain them has not been decided. A government official said, "We are reviewing reform plans." An REB official also said, "As far as we know, no decision has been made on how to proceed with the overhaul."
The REB's weekly apartment price statistics became controversial under the current administration around the time of last year's National Assembly audit. At a "forum on ways to improve housing price statistics" hosted at the National Assembly on Sept. 30 last year by Democratic Party of Korea lawmakers Lee Yeon-hee and Yum Tae-young, and during the Oct. audit, Democratic Party of Korea lawmakers argued for abolition, saying "the weekly statistics fuel speculation by triggering an overly sensitive market reaction." Kim Yun-duk, the land minister, also said at the Oct. 13 audit last year, regarding this, "I fully agree with the overall trend (toward abolishing the weekly statistics). We will take steps to reduce the harms caused by the statistical problems."
The reason the government is mired in indecision is that the REB's data are the only official government statistics. Private firms such as KB Real Estate and Real Estate 114 also release weekly apartment price trends, but they are not government-managed statistics. If the REB statistics are abolished, the government would effectively lose the basis for setting policy direction. Yoo Sun-jong, a professor in the department of real estate at Konkuk University, said, "There has long been criticism that weekly releases are of little significance and only consume budget, but policymakers need to screen market changes, so it is difficult to abolish the statistics," adding, "They have become a kind of albatross."
◇ The "11% remark" six years ago sparked distortion controversy
Problems with the Korea Real Estate Board (REB)'s home price statistics go back to the Moon Jae-in administration. In July 2020, then Minister of the Ministry of Land, Infrastructure and Transport Kim Hyun-mee said, based on the REB's statistics, that nationwide home prices had risen 11%. Compared with private data such as KB prices (52%), there was a significant gap, raising suspicions of distortion.
After the launch of the Yoon Suk-yeol administration, in September 2023 the Board of Audit and Inspection announced the results of an audit related to statistical distortion controversies during the Moon Jae-in administration, including in real estate. The crux of the audit findings was that numerical manipulation had occurred and an investigation was needed. In March 2024, prosecutors, who were asked to investigate, indicted former Minister Kim Hyun-mee and 10 others, including former Blue House policy chiefs Kim Soo-hyun and Kim Sang-jo, on charges of abuse of authority and violating the Statistics Act. Prosecutors said they manipulated the weekly dwelling price change rate 125 times. The trial is still in its first-instance hearing.
Experts voice a range of views, from abolishing the weekly statistics altogether to collecting the data but not publishing them. Some also argue for releasing the entire sample data to strengthen statistical transparency.
Kim Jin-yoo, a professor in the department of urban transportation engineering at Kyonggi University, said, "Weekly home price statistics have an inherent attribute that inevitably produces errors (because the survey period is short)," adding, "Many scholars argue they should not be compiled."
Seo Jin-hyung, a professor in the department of real estate law and policy at Kwangwoon University, said, "Given the nature of real estate, where consumers cannot accurately know the list price (jeongga), it is meaningful for a public institution to regularly survey the rate of price change," adding, "However, to improve credibility, the survey period should be extended to two weeks or a month, and the number of samples should be increased."
An expert who requested anonymity said, "Manipulating statistics to suit the ruling party or a particular government is tied to trust in the state, so in any case, manipulation of statistics should be punished severely."
Kim Hak-ryeol, head of the Smart Tube Real Estate Research Institute, said, "Before any statistics are released, outliers such as the highest and lowest values are removed, but the public cannot know what was excluded in this process, which is why controversy over manipulation never ends." Kim added, "If the government releases, in a format such as an Excel file, all transaction contracts that were part of the sampling, so anyone can see them along with the statistics, confidence in the data will rise and it will be hard for anyone to raise manipulation suspicions, so the government should implement this approach."
The sample for the Korea Real Estate Board (REB)'s weekly statistics was 9,400 households nationwide through 2020, increased to 32,000 households in 2021, and is now 33,500 households.