Korea’s housing sales data under fire for allegedly failing to reflect market

Minster of Land, Infrastructure and Transport Won Hee-ryong [Photo by Yonhap]

Controversy is intensifying over the house sales statistics in South Korea with the land minister accusing the previous administration of manipulating home price data, which led to failures in public policy.

Minster of Land, Infrastructure and Transport Won Hee-ryong in his Facebook post accused the previous government of deceiving the public by using house sales statistics that are “far off from reality” and pledged his full cooperation in the investigation with the Board of Audit and Inspection (BAI).

His remarks come as the country’s audit institution is looking into the statistical method and process related to the country’s housing market. The BAI recently completed on-site inspection at the Ministry of Land, Infrastructure and Transport, the Statistics Korea and the Korea Real Estate Board (REB).

The country’s statistical method of house sales came under fire after a civic group challenged the government‘s data on home price growth in 2020. The land minister at that time said apartment prices in Seoul rose 14 percent over three years, referring to REB’s monthly house transactions data. However, Citizens’ Coalition for Economic Justice, a civic group, claimed Seoul apartment houses jumped 52 percent, showing a huge gap from the government data. The civic group’s claim was based on sales transactions data from KB Kookmin Bank, a major commercial bank in Korea.

The previous government responded to the claim by offering to expand the number of samples in collecting house sales data and having experts from the private sector to review the national statistics data.

The real estate industry, however, argues that REB’s statistical method is made in a way that its data can be easily manipulated per the government’s policy direction. The industry officials pointed out that REB’s house sales price index is based on price at which transactions are “possible,” and the prices are estimated by compiling offering and sales prices of houses in sampled areas. The problem is the REB data can be accepted even if it does not reflect the actual market situation, said an industry expert. For example, the REB data may not increase the price at which house can be sold for a sampled area with soaring offering price if actual transaction recorded zero.