Exposed Moon Government's 'Housing Price Manipulation'... Changed and Hidden Over 94 Times (Comprehensive)

Audit Board Announces Results of 'National Statistics Preparation and Utilization' Audit
Improper Influence Exerted by Cheongwadae and Others Leading to Statistics Manipulation... Unfair Pressure Included
Multiple Investigations of Former Minister of Land Kim Hyun-mi and Policy Chief During Moon Jae-in Administration

An audit revealed that the previous Moon Jae-in administration's Blue House and Ministry of Land, Infrastructure and Transport pressured Statistics Korea and the Korea Real Estate Board (formerly Korea Appraisal Board) to manipulate statistical figures. Since the statistics form the basis for government real estate policy formulation, the distorted policies resulted in the public bearing the brunt of the damage. The Moon administration can no longer avoid criticism that it failed to properly manage national housing supply. Considering that the market distortion caused by such statistical manipulation led even the Seoul Metropolitan Government to consecutively halt permits for redevelopment projects, the repercussions of the policy failures at that time are expected to continue.

On the 15th, the Board of Audit and Inspection announced the results of the audit on the 'Preparation and Utilization of Major National Statistics,' conducted on the Ministry of Land, Infrastructure and Transport, Statistics Korea, and others, in accordance with the '2022 Annual Audit Plan' confirmed by the Audit Committee.

This audit was conducted due to ongoing concerns raised by the National Assembly and the media regarding the reliability and accuracy of national statistics, which serve as the foundation for national policy formulation. The core issue was that before the housing price trend was publicly announced, 'provisional statistics' shared only within the Korea Real Estate Board were reported in advance by Ministry officials to the Blue House, and the Korea Real Estate Board arbitrarily lowered housing price statistics during their survey.

Blue House and others exerted undue influence 94 times... Arbitrarily applied weights when asked to explain price increases

These suspicions were confirmed by the audit results. The Board of Audit and Inspection found that the Presidential Secretariat (Blue House) and the Ministry of Land, Infrastructure and Transport pressured Statistics Korea and the Korea Real Estate Board, the statistical agencies, directly and indirectly, to manipulate statistical figures or distort statistical descriptive information, engaging in various illegal acts.

In fact, over five years since May 2017, the gap between housing statistics from the Korea Real Estate Board and KB, a representative private real estate statistics agency, widened significantly. During this period, KB assessed the real estate fluctuation rate in Seoul at a 62.20% increase, while the Korea Real Estate Board calculated it at only 19.46%, less than half. The gap between the two statistics, which was only 0.4 percentage points between 2008 and 2012, expanded to 15.2 percentage points after 2017, a 38-fold increase.

Choi Dal-young, the First Deputy Auditor of the Board of Audit and Inspection, is making a presentation on the request for investigation related to the 'Preparation and Utilization Status of Major National Statistics' at the Board of Audit and Inspection's Third Annex in Jongno-gu, Seoul, on the 15th.
[Photo by Yonhap News]

The Board of Audit and Inspection confirmed that the Blue House and Ministry exerted undue influence as many as 94 times. From June 2017, the Blue House and Ministry illegally received provisional and preliminary statistics from the Korea Real Estate Board in advance and exerted influence by arbitrarily applying weights to the provisional statistics to lower the reported housing price increase rates.

Furthermore, if the weekly fluctuation rate was higher than the previous week or if it was deemed necessary to demonstrate the effectiveness of real estate measures, the Korea Real Estate Board was instructed to review and explain the reasons for the increase and even requested on-site inspections. Consequently, the Korea Real Estate Board initially prepared and reported the provisional statistics at artificially lowered levels.

Manipulated new samples as public distrust of policy grew... "If you don't cooperate, I'll destroy you"

[Image source=Yonhap News]

Just before the announcement of real estate measures, no action was taken even if the fluctuation rate rose, but after the announcement, the fluctuation rate was manipulated downward to make the effect appear significant. As public distrust of the Korea Real Estate Board's statistics, which were significantly lower than private statistics, spread, the Korea Real Estate Board concealed the manipulation by conducting so-called 'sample price realization' and 'sample redesign.' This involved illegally adjusting previously confirmed and announced sample prices upward or newly replaced sample prices downward.

From June 12, 2017, the weekly report to the Ministry, previously once a week, was divided into 'provisional statistics (surveyed Tuesday to Thursday, reported Friday),' 'preliminary statistics (surveyed Tuesday to Monday, reported Monday),' and 'final statistics (surveyed Tuesday to Monday, reported Tuesday),' and provided three times a week to the Blue House and Ministry. At that time, the Korea Real Estate Board requested twice to suspend the midweek survey, citing potential legal issues, but the Blue House rejected these requests. The Blue House even pressured the Board to investigate reasons if the preliminary or final statistics were reported higher than the provisional statistics, which were predictive.

There were also cases where data accessible to the public was modified. Around mid-June 2019, just before the second anniversary of the Ministry of Land, Infrastructure and Transport Minister's inauguration, the fluctuation rate, which had been declining since the 'September 13 Measures,' gradually rose, and when the Seoul sales fluctuation rate shifted from negative to flat in the third week of June, the Korea Real Estate Board was pressured again.

In particular, during this process, the Ministry reportedly summoned Korea Real Estate Board employees to the office and said, "If you do not cooperate properly, I will destroy the Korea Appraisal Board's organization and budget." Consequently, until the second week of August, the Korea Real Estate Board consistently maintained Seoul's preliminary and final statistics at about 0.02%, differing from reality, and accordingly revised and distributed press releases.

[Image source=Yonhap News]

Blue House Public Service Discipline Office knew but turned a blind eye... Manipulated household income and employment statistics as well

A more serious issue is that the Blue House Public Service Discipline Office and others knew about the Blue House and Ministry's external pressure but turned a blind eye. According to the audit, after identifying the facts, the Public Service Discipline Office only requested that direct contact with the Ministry and the Blue House Land, Infrastructure and Transport Secretariat be refrained from.

Additionally, it was confirmed that after the Moon administration took office, Statistics Korea manipulated statistics when household income and distribution declined and worsened. When household income decreased in the second quarter of 2017 for the first time since 2010, the calculation method was arbitrarily applied to make it appear as if household income had increased. In employment statistics, the surge in non-regular (fixed-term) workers was attributed to the effect of parallel investigations, and interference in the announcement of statistical results and preparation of press releases was also revealed.

The Board of Audit and Inspection requested the prosecution to investigate related individuals suspected of violating the Statistics Act, abuse of authority, and obstruction of business on the 13th. Investigations were requested for a total of 23 people, including six Blue House senior secretaries such as former Economic Secretary Hong Jang-pyo and former Job Secretary Hwang Deok-soon, three Ministry of Land, Infrastructure and Transport officials including Minister Kim Hyun-mi, three Statistics Korea officials including former Commissioner Kang Shin-wook, and three Korea Real Estate Board officials.

Previously, former Minister Kim Hyun-mi, former Blue House Policy Chief Kim Sang-jo, former Blue House Policy Chief Jang Ha-sung, and former Blue House Policy Chief Kim Soo-hyun were reportedly interviewed in person. Former Statistics Korea Commissioners Hwang Soo-kyung and Kang Shin-wook, former Secretary Hwang Deok-soon, former Secretary Hong Jang-pyo, former First Vice Minister of Land, Infrastructure and Transport Yoon Sung-won, and other Blue House aides and ministry officials were also investigated one after another. An official from the Board of Audit and Inspection stated, "We plan to finalize the audit results and take measures after the Audit Committee's resolution as soon as possible."

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