[2020 National Audit] Song Eon-seok "Appraisal Board Statistics Spike Every Year Following KB Statistics During Sample Adjustments"

Minister of Land, Infrastructure and Transport Kim Hyun-mi is reporting on duties at the National Assembly Land, Infrastructure and Transport Committee's audit of the Ministry of Land, Infrastructure and Transport, the Administrative City Construction Agency, and the Saemangeum Development Agency held on the morning of the 16th at the Government Complex Sejong in Sejong City.
[Photo by Yonhap News]

[Asia Economy Reporter Lee Chun-hee] Suspicions have been raised that the statistics of the Korea Real Estate Board, a nationally certified real estate statistic, change every year due to sample adjustments. The Ministry of Land, Infrastructure and Transport rebutted, saying, "Adjustments are made every year" and "It is not done arbitrarily."

At the Ministry of Land, Infrastructure and Transport's audit held at the Sejong Government Complex on the 16th, Song Eon-seok, a member of the National Assembly Land, Infrastructure and Transport Committee from the People Power Party, claimed, "The Korea Real Estate Board's statistics can change depending on how the samples are handled," and added, "This is evidence that the samples are flawed."

Difference in Statistics between Korea Appraisal Board and KB Kookmin Bank Analyzed by Song Eon-seok, Member of the People Power Party (Source: National Assembly Broadcast Capture)

Rep. Song pointed out that, based on a comparative analysis of the Seoul apartment sales price indices from the Korea Real Estate Board and KB Kookmin Bank, the difference in growth rates between the two indices was as much as 38 times. According to Song's analysis, during the Lee Myung-bak administration (March 2008 to February 2013), the Korea Real Estate Board's index decreased by 4.1%, from 89.7 to 86.0, while KB Kookmin Bank's index decreased by 4.5%, from 91.1 to 87.0, resulting in a gap of 0.4 percentage points between the two institutions' statistics. During President Park Geun-hye's term, the difference in the sales price indices between the two institutions remained at about 2.1 percentage points and did not increase significantly.

However, after the inauguration of the Moon Jae-in administration, the growth rates of the two institutions began to show a marked difference. From May 2017, when President Moon took office, until last August, the Korea Real Estate Board's Seoul apartment sales price index rose by 15.7% (from 97.3 to 112.6). In contrast, KB Kookmin Bank's index increased by 30.9% (from 96.1 to 125.8), nearly double, resulting in a gap of 15.2 percentage points between the two institutions. When simply compared, the gap increased 38 times compared to the Lee Myung-bak administration and 7 times compared to the Park Geun-hye administration.

Regarding this, Minister of Land, Infrastructure and Transport Kim Hyun-mi explained, "The Korea Real Estate Board started producing statistics in 2013," and added, "(The previous statistics) were recreated by the Real Estate Board based on KB Kookmin Bank's statistics, so it is natural that they are almost identical."

In response to Rep. Song's question, "Then do you acknowledge the widening gap after 2013?" Minister Kim rebutted, "KB Kookmin Bank's statistics are based on asking prices, so the gap inevitably widens during a rising market."

Rep. Song also raised suspicions about the Korea Real Estate Board's statistical calculation method itself. He argued that the statistics are more influenced by sample adjustments than by real estate policies, and that each time adjustments are made annually, the Real Estate Board's statistics quickly catch up to KB Kookmin Bank's statistics. According to Song's analysis, around the times of annual sample adjustments since 2017, the average apartment sales price in Seoul surged by 6.0% to 12.9%. For example, during the adjustment in January 2019, the average sales price rose from 717.75 million won in December 2018 to 810.13 million won in January 2019, an increase of 92.38 million won, representing a 12.9% rise.

Minister Kim dismissed the suspicions, stating, "Sample adjustments are comprehensively redesigned every five years, and partial adjustments are made every January." Regarding the growth rates, she rebutted, "There are fluctuations in the sales price index growth rates after sample adjustments. Past administrations saw changes of about 1.2% to 1.99%, and the current administration has fluctuations of about 1% to 2%, so there is no significant difference."

This content was produced with the assistance of AI translation services.