"Moon Administration Claims 17% Rise in Apartment Prices but Raises Official Prices by 86%"

Kyungsillyeon "Government Manipulating Price Statistics Low to Hide Housing Bubble Is the Problem"

[Asia Economy Reporter Onyu Lim] A survey revealed that the official announced prices of apartments in Seoul increased by 86% during the four years of the Moon Jae-in administration. The government had claimed that Seoul apartment prices rose by 17%, but the official announced prices, which serve as the basis for tax imposition, actually increased more than five times that amount.

The Citizens' Coalition for Economic Justice (CCEJ) held a press conference on the 30th at a hall in Jongno-gu, Seoul, announcing that the official announced price of Seoul apartments rose from 420 million KRW in May 2017 to 780 million KRW in January 2021, an increase of 360 million KRW (86%) over four years. Meanwhile, actual apartment prices during the same period rose from 620 million KRW to 1.11 billion KRW, an increase of 490 million KRW (79%). The rate of increase in official announced prices thus exceeded the actual apartment price increase rate.

CCEJ analyzed the market prices of 115,000 apartment units in 75 complexes in Seoul over four years from May 2017, when President Moon took office, to May this year. Using market price data from sources such as KB Kookmin Bank, they calculated prices per pyeong and estimated apartment prices and official announced prices based on a 30-pyeong apartment.

By region, the official announced price of apartments in the Gangnam area rose from 800 million KRW in 2017 to 1.63 billion KRW in 2021, an increase of 830 million KRW (104%). During this period, the apartment price increase rate in this area was 74% (1.3 billion KRW → 2.27 billion KRW). In the same period, the official announced price of apartments in the 22 non-Gangnam districts rose from 360 million KRW to 660 million KRW, an increase of 300 million KRW (81%), and the apartment market price increase rate was also 81% (530 million KRW → 950 million KRW).

In particular, CCEJ pointed out that the Ministry of Land, Infrastructure and Transport’s statistical data showed a smaller increase in housing prices than their own survey results, failing to accurately reflect reality. The government reportedly responded to CCEJ’s inquiry in January about the rate of increase in Seoul apartment prices during President Moon’s term by stating it was 17.17%. According to CCEJ, the apartment market price in 2017 for a 30-pyeong unit was 620 million KRW, but applying the government statistics results in only a 100 million KRW (17%) increase, showing a significant discrepancy with reality. A CCEJ official claimed, “While the government said housing prices did not rise, the tax base price for tax imposition increased five times more than the housing price rise.”

Sim Sang-jung, a lawmaker from the Justice Party, said at the press conference, “The government is so focused on hiding its real estate failures that citizens’ distrust of real estate policies is intensifying,” and urged, “The government must honestly acknowledge policy failures and immediately stop using distorted statistics.” She added, “Property tax bills will soon be delivered to households, and if the information about real estate prices differs from reality, doubts about property taxes will erupt,” and said, “If the government transparently discloses which figures are truthful, wouldn’t the public trust the policies and tax standards?”

Sim also added that she would conduct a fact-finding investigation together with CCEJ to review the overall production of statistics.

CCEJ argued that the authority to determine official land prices held by the Ministry of Land, Infrastructure and Transport should be transferred to local governments. They also added that the official land price reflection rate should be raised to over 80% so that real estate owners of commercial and other non-residential buildings can pay a fair level of taxes.

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