Government Housing Prospect Statistics Found to be Erroneous

There have been an increasing number of people pointing out that there is an urgent need to reestablish the basic data of the housing policies. According to the related industry on the October 27, the Ministry of Construction and Transportation has expected in the recently published “Housing Price Stability Factors” report that the apartment move-in number next year in Seoul will be 50,939 households. This number is between 2,800 households less and 1,700 households more than the amount that private companies had expected. Also, the Ministry expects the 59,349 households to move into housing this year, but this number is 11,961 households less than the level of the private companies’ expectation.

The reason for this difference derives from the fact that the government has expected the amount of move-in households to change simply by percentages of 5 percent after one year, 30 percent after two years, 50 percent after three years, and 15 percent after four years by the standard of apartment construction approval dates.

Kim, Son-duk, director at the Construction Industry Strategy Institute, pointed out about the issue, “The government’s statistics has to be revised as soon as possible. For the case of the move-in apartments, the standard should change to the completion date of the construction and thus be offered to official statistics.”

The Ministry of Construction and Transportation has admitted, “We did not take the reality well into consideration that the construction projects get delayed for more than two years at the most since the approval of construction due to the situations of the construction companies. We will report again early next month after counting the dates of the construction completion since 1955 after taking them as the standard of move-in number of apartments.”

The number of reconstruction projects has been part of the issue. The report called “Housing Supply Prospect in Gangnam, Seoul” recently revealed by the Ministry expects the number of the apartments for sale starting from next year to reach 35,200 households by the year 2007 in Gangnam, Gangdong, and Songpa in Seoul. Based on this, the government has prospected that this number, exceeding ten times the yearly average of sold apartment in three years (2,489 households), would greatly contribute to relieving the short supply of housing in Gangnam area.

However, some point out that it is problematic to include apartments that are going through safety inspection procedures currently and thus are unclear as to whether or not they would be able to proceed in completing the project under the situation where the government has strictly expanded the related rules regarding the reconstructing apartments. According to the Ministry of Construction and Transportation, the apartments that are going through safety inspection procedures take up 35 percent, reaching 12,265 households out of the 35,282 household apartments that will be put up for sale by 2007.

Jae-Seong Hwang Cheol-Yong Lee jsonhng@donga.com lcy@donga.com