Real Estate Agency Pressured as House Prices Shift from Negative to Stable... Lowered Announcements for Two Months (Update)

Audit Board Announces Results of 'National Statistics Preparation and Utilization' Audit
Cheongwadae and Others Exerted Undue Influence to Manipulate Statistics... Unfair Pressure Applied

An audit revealed that the former Moon Jae-in administration's Blue House and the Ministry of Land, Infrastructure and Transport pressured Statistics Korea and the Korea Real Estate Board (formerly Korea Appraisal Board) to manipulate statistical figures. At the time, the Blue House and the Ministry of Land, Infrastructure and Transport exerted undue influence more than 94 times, illegally receiving statistics in advance from the Korea Real Estate Board since June 2017, and influenced the figures so that the housing price increase rate appeared lower.

On the 15th, the Board of Audit and Inspection announced the results of the audit on the 'Preparation and Utilization Status 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 resolution of the Audit Committee.

Choi Dal-young, the First Deputy Auditor of the Board of Audit and Inspection, is making a presentation on the investigation request 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.
[Image source=Yonhap News]

This audit was conducted due to continuous concerns raised by the National Assembly and the media regarding the reliability and accuracy of national statistics, which serve as the basis for national policy formulation. 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 the statistical agencies, Statistics Korea and the Korea Real Estate Board, directly or indirectly, to manipulate statistical figures or distort statistical descriptive information, engaging in various illegal activities.

The Board of Audit and Inspection confirmed that the Blue House and the Ministry of Land, Infrastructure and Transport exerted undue influence as many as 94 times. From June 2017, they illegally received preliminary data such as weekly and flash estimates from the Korea Real Estate Board and influenced the weekly estimates by arbitrarily applying weights so that the housing price increase rate appeared lower.

Furthermore, if the rate of change appeared higher than the previous week or if it was deemed necessary to demonstrate the effectiveness of real estate measures, they instructed the Korea Real Estate Board to review the data, demand explanations for the reasons behind the increase in the rate of change, and request on-site inspections. Consequently, the Korea Real Estate Board initially prepared and reported the weekly estimates and other data at artificially lowered levels.

Just before the announcement of real estate measures, even if the rate of change increased, no action was taken, but after the announcement, the rate of change was manipulated downward to make the effect appear significant. As public distrust in the Korea Real Estate Board's statistics, which were significantly lower than private statistics, spread, the Korea Real Estate Board conducted so-called 'sample price realization' and 'sample redesign' to conceal the manipulation.

There were also instances where the data accessed by the public was modified. Around June 2019, just before the second anniversary of the Minister of Land, Infrastructure and Transport's appointment, the rate of change, which had been declining since the 'September 13 Measures,' gradually increased, and the weekly housing price change rate in Seoul shifted from negative (-) to stable in the third week of June. The Ministry of Land, Infrastructure and Transport pressured the Korea Real Estate Board again. As a result, the Korea Real Estate Board maintained the flash and confirmed estimates for Seoul at about 0.02% until the second week of August, differing from the actual figures, and accordingly revised and distributed press releases.

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

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