“Those who are buying houses now are not end users. Rather, they are speculators who are causing price instability.”
“Housing supply in Seoul and the nearby region is enough. Speculative demand is at work due to low-interest rates.”
During the Moon Jae-in administration, public officials often offered responses like the above when asked about real estate policies. It was the reality that someone was buying a house at a higher price than before, which raised its price, whether it was due to a low-interest rate or speculation. I often felt frustrated with responses like these, which seemed to simply deny the reality.
Upon reading the audit results of the real estate-related statistics during that time, which the Board of Audit and Inspection recently published, I was reminded of the ‘collective denial of the reality.’ At the time, I thought it stemmed from the difficulty that the public officials couldn’t really speak honestly to a reporter even if they were aware of their mistakes and errors. However, according to the audit results, the members of the presidential office, Cheong Wa Dae, and Land, Infrastructure, and Transport Ministry officials seemed to have proactively tried to justify the ‘denial of the reality’ into the fake reality.
Of course, they must have something to say. According to the Korea Real Estate Board’s research process of the housing price trends, prices can be set considering similar transactions as the transaction of a sample apartment unit is unlikely to be made on a weekly basis. This leaves room for a researcher’s personal opinion to be involved. The second and third persons, other than the on-site researcher, can adjust prices following the process of internal report, etc. in order to ensure objectivity and accuracy, which means the involvement of Cheong Wa Dae and the ministry can be claimed as part of such ‘adjustment.’
However, what’s important is that Korea Real Estate Board employees felt so much pressure that they even collected evidence during the process to make a report. The employees had to collect, analyze, and report weekly statistics three times under the hierarchy of Cheong Wa Dae, the Ministry of Land, Infrastructure and Transport, and the Korea Real Estate Board. According to the Board of Audit and Inspection, appeals like ‘our line would be all gone’ and threats to remove the organization and the entire budget were exchanged, which must have caused a lot of stress.
Weekly apartment housing price trends are statistics used to gauge the overall real estate market trends and directions, rather than how much housing prices increased, as the research term is too short and it has limitations of sampling. It is even more so considering that a real estate transaction is registered within a month and that a transaction can be canceled later sometimes. However, dozens of people were working for several years to either increase or decrease one or two decimal places. It was a fight against a non-existent enemy.
The real estate market is composed of tens of thousands of transactions. Once a large movement is formed, it is hard to be controlled. The market trends are not something one can win against, and they are certainly not an enemy. As a result of fighting an enemy like this, the Moon Jae-in administration failed to present policies that fit the big trends of the market, the results of which must be borne by the public. Who is going to take the responsibility for the broken trust in statistics? I’d like to hold accountable those who treated the real estate market as an enemy.