2024-05-01 15:23:36
Statistics such as the number of construction completed in Seoul last year are missing.
It was revealed that the housing supply performance, which is the basis for predicting the real estate economy and establishing government policies, was 192,000 fewer units than the actual number last year. Based on these incorrect statistics, the government established and announced the September 26th Supply Measures last year and the January 10th Real Estate Measures this year. It is pointed out that the credibility of government policies will inevitably suffer.
According to the Ministry of Land, Infrastructure and Transport on the 30th, due to a system error between July and December last year, redevelopment and reconstruction and residential-commercial complexes with more than 300 units were omitted from housing supply performance statistics. In September of last year, an error occurred in which houses with changed business information were omitted from completion statistics. The Ministry of Land, Infrastructure and Transport announced that it was aware of this at the end of January of this year and carried out work to correct the error, including a thorough investigation, for about three months.
Last year’s housing completion volume was revised to 436,055 units, an increase of 37.8% (119,640 units) from the previous announcement (316,415 units). In particular, in Seoul, where urban development projects are concentrated, the actual number of completed units was 41,218, which was 51.1% (13,941 units) more than before the error was corrected (27,277 units). An entire complex the size of Olympic Park Foreon (12,032 units) in Gangdong-gu, Seoul was omitted from the statistics.
Licenses (388,891 units → 428,744 units) and construction starts (209,351 units → 242,188 units) also increased by 10.2% and 15.7%, respectively. The total number of missing units is 192,330, which is more than the 166,600 units in Bundang City (97,600 units) and Ilsan New Town (69,000 units) combined.
Statistics on 190,000 units, which is more than Bundang+Ilsan, were omitted, and the increase in construction was announced as a decrease.
Ministry of Land, Infrastructure and Transport used incorrect statistics as the basis
Result of correction of errors in last year’s completion performance
‘Increase, not decrease’ changed 180 degrees
A blow to trust in government real estate policy
Following the Korea Real Estate Agency’s suspicion of manipulating housing price statistics, a large number of housing supply results were omitted from the statistics, raising the issue of trust in the government’s real estate statistics. The Ministry of Land, Infrastructure and Transport stated that it was simply ‘missing data’, but there are many voices pointing out the seriousness of the problem in that the scale alone exceeds 190,000 and measures have already been prepared based on the statistics.
● Although construction completions increased last year, it was announced as a ‘decrease’
According to the Ministry of Land, Infrastructure and Transport on the 30th, this statistical error occurred during the reorganization of the housing supply database (DB) system. The Ministry of Land, Infrastructure and Transport previously produced statistics by directly linking the Housing Supply Statistics Information System (HIS) and Seumteo (Building Administration Information System). Local government officials input statistics on permits, construction starts, and completions into Seumteo and pull them into HIS.
Due to the revision of the Electronic Government Act, this system was changed from July of last year to no longer directly link Seumteo and HIS, but to go through the ‘National Standard Data Management System’. At this time, in the process of connecting from the national standard data management system to HIS, an error occurred in which the maintenance project (reconstruction/redevelopment) volume and more than 300 residential-commercial complexes were omitted.
In September of last year, a system bug occurred during the HIS function improvement work, resulting in an error in which the house was omitted from the completion records if the business providing the house changed midway. An official from the Ministry of Land, Infrastructure and Transport said, “We had suspicions that the supply performance at the end of January this year seemed to have decreased by an excessively large amount compared to the past, and during discussions with local governments, we learned that the numbers were different, so we conducted a full investigation starting in February.”
Last year’s completion number was 316,415 units before this correction. This is a 23.5% decrease compared to the previous year (413,798 units). However, after the error was corrected, the number of houses completed last year was 436,055, an increase of 5.4% compared to the previous year.
There is also criticism of the Ministry of Land, Infrastructure and Transport’s delayed response. This is because the accuracy of statistics was not verified until more than half a year had passed since the system was reformed in July of last year, and it took three months to correct the error even after it was discovered. The housing statistics for January (announced at the end of February) and February (announced at the end of March), which were announced in the meantime, also used supply statistics (quantity of permits, construction starts, and completions in 2023) that contained errors. An official from the Ministry of Land, Infrastructure and Transport said, “We were unable to revise the housing statistics for January and February due to the complete survey process after the end of January.”
● Provide supply measures based on incorrect statistics
The ‘September 26 Supply Measures’ introduced by the Ministry of Land, Infrastructure and Transport last year and the ‘January 10 Real Estate Measures’ introduced early this year were both focused on supply. The September 26 supply plan diagnosed that “housing supply has contracted in the short term as supply conditions have worsened since the second half of last year.” In the 1/10 measure, it was observed that “licenses and construction starts, which are leading indicators of housing supply, decreased last year, and among them, rowhouses and multi-family homes decreased even more significantly.” It was confirmed that the basis for this diagnosis was all incorrect statistics.
Seo Jin-hyeong, a professor of real estate law at Kwangwoon University (president of the Korea Real Estate Management Association), said, “I don’t understand why they couldn’t find a statistical error while introducing two major measures.” “I was able to give it to you,” he said.
In a briefing today, the Ministry of Land, Infrastructure and Transport claims that there is no impact on the supply expansion policy because the market situation of immediate supply contraction remains unchanged. An official from the Ministry of Land, Infrastructure and Transport said on this day, “Even if the supply performance is undercounted, the trend is unchanged from the previous year. Before the statistical correction, licenses decreased by 26% from the previous year, but after the correction, they decreased by 18%, a big difference that can change the policy direction.” “No,” he said.
However, experts believe that it is difficult to conclude that there will be no impact as there may be a mismatch between supply and demand. Song In-ho, director of the Economic Information Center at the Korea Development Institute (KDI), said, “Supply performance is a statistic that not only the government but also private businesses and consumers use for business promotion and purchase decisions,” adding, “If an error occurs, it can lead to future supply and demand instability or policy distrust.” “There is,” he emphasized. Kim Jin-yu, a professor of urban transportation engineering at Kyonggi University, advised, “Instead of relying mechanically on statistical figures, we also need procedures to evaluate and verify reliability.”
Reporter Lee Seok-bok [email protected]
Reporter Choi Dong-su [email protected]
2024-05-01 15:23:36