[Asia Exclusive] Yang Gilsu, President of the Korea Association of Property Appraisers, "Committed to Strengthening Public Interest in Appraisals Directly Linked to Citizens' Property Rights"

Interview with Yang Gilsu, President of the Korea Association of Certified Appraisers

Appraisers Determine Real Estate Compensation Amounts
Fairness Gains Importance Amid Various Development Privilege Issues
Efforts to Establish Detailed Evaluation Standards and Improve Techniques
Forming Policy Partnership with Ministry of Land, Infrastructure and Transport After Past Conflicts

Yang Gil-su, President of the Korea Association of Property Appraisers, is being interviewed on the 22nd at the Korea Association of Property Appraisers in Seocho-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Interview with Jeong Doohwan, Head of Construction and Real Estate Department; Summary by Reporter Moon Jewon]

"The appraisal system exists to protect the property rights of the people and to promote national economic development. In the past, there were disputes with the government over areas of responsibility, but now we are working to strengthen public interest as a policy partner of the government. As public interest in real estate grows, the association will also devote itself to supporting the government's real estate policies."

Yang Gilsu, President of the Korea Association of Certified Appraisers, said this in an interview with Asia Economy on the 22nd at the association's headquarters in Bangbae-dong, Seocho-gu, Seoul, regarding the roles and responsibilities of appraisers. Appraisers, who evaluate the value of real estate such as land and buildings, are becoming increasingly important due to factors like housing price instability and the expansion of new town developments. Recently, issues such as the Seongnam Daejang-dong development scandal and land speculation by employees of the Korea Land and Housing Corporation (LH) have raised concerns about the fairness and reliability of appraisals.

In this context, President Yang emphasized that appraisers are striving to find ways to contribute to stabilizing the real estate market and the national economy. He explained, "Since becoming president, I have met with various government officials related to real estate to discuss in depth the establishment of public interest in appraisers and ways to contribute to policy. We will lead the appraisal industry to a new level in line with changing times and environments."

Given that appraisers determine compensation amounts during real estate development, which greatly affects the property rights of the people, he said they are also committed to securing public trust. He stated, "Appraisal determines the value of an individual's assets. It is important to find and present accurate prices that the public can trust. That is our fundamental duty."

We met with President Yang to hear about current issues and development plans for real estate appraisal.

- What activities have you focused on since taking office as president?

▲ The appraisal system will mark its 50th anniversary next year. For the system to operate according to its original purpose, legal and institutional support is necessary. Since taking office, we have strengthened our relationship with the Ministry of Land, Infrastructure and Transport as a policy partner and signed a memorandum of understanding with the Korea Real Estate Board, with which we had long-standing conflicts, to cooperate. This is laying the foundation for a leap forward. We have also worked with the Ministry to improve the compensation system and conduct public land price surveys and evaluations at a level understandable to the public.

- The government's sharp increases in publicly announced land prices cause repeated opposition from homeowners and local governments every year. How should this be improved?

▲ Publicly announced land prices are used for about 60 administrative purposes, including property tax levies and health insurance premium calculations. They have a significant impact on people's lives. While long-term price realism is necessary, we need to consider what market price should be the standard for the realization rate. Actual transaction prices might be considered market prices, but in reality, they are difficult to use as a standard because various circumstances of stakeholders are involved. Therefore, if a system is introduced to verify and adjust actual transaction prices, appraisers can play a major role. Also, to resolve tax inequity issues, non-residential real estate should be publicly announced as well.

- Recently, some residents have pointed out problems with the current appraisal system, claiming they suffered losses due to improper appraisal in connection with preferential treatment allegations in the Daejang district development project.

▲ From the perspective of original residents, land expropriation means losing their homes. If real estate prices rise significantly after development, they will feel relative deprivation. However, the Land Compensation Act stipulates the principle of excluding development gains, so the increase in value due to the public project cannot be reflected in compensation. Compensation evaluation excluding development gains should be conducted fairly according to principles, but in the long term, how to distribute profits from public projects should be addressed through systems and policies.

- The importance of appraisal is increasing in public development land compensation, such as urban public housing complex projects. What measures can alleviate residents' distrust and accelerate projects?

▲ Fair and objective appraisals must be conducted so that residents accept them and projects proceed smoothly. In redevelopment projects, appraisal fairness among stakeholders such as union members is especially important, so the basis for evaluation must be objectified. This increases acceptance among stakeholders. The association has established detailed appraisal standards for redevelopment projects and continuously improves appraisal techniques to strengthen reliability.

- Are there ways to increase public trust in appraisals?

▲ The association operates a review system to enhance the fairness and objectivity of appraisals and strengthen quality control. We also introduced a system where the association recommends appraisal institutions to perform appraisals independently from clients. The amended Appraisal Act, passed by the National Assembly in July and scheduled to take effect in January next year, explicitly requires appraisers to perform their duties fairly and objectively. The government is also working to prohibit anyone from inducing or demanding appraisals at specific values.

- There was controversy over recognizing the experience of appraisers from the Korea Real Estate Board or banks. Concerns were raised about preferential treatment for retired appraisers from public institutions.

▲ For appraisers to fulfill their social responsibilities, it is necessary to advance into various fields of society. If they demonstrate expertise and reliability in various sectors, they can greatly contribute to national policies and people's lives. Recognizing the experience of appraisers working outside the appraisal industry helps them enter diverse fields. If there is an issue of preferential treatment, it will not disappear simply by restricting experience recognition. Experience recognition is to acknowledge objective experience, not to grant special privileges.

- The association recently announced plans to build a win-win and cooperative relationship with proptech companies. In what direction will this develop?

▲ The Fourth Industrial Revolution is the trend of the times. Accepting and utilizing new technologies is very important in any field. This is why cooperation and coexistence with proptech companies are necessary. Appraisers have also developed and introduced various systems in line with the times. Going forward, we plan to provide better services to the public and the nation through the convergence of expert collective intelligence and artificial intelligence. We will also discuss ways to improve quality control and trust in proptech.

Interview by Jeong Doohwan, Head of Construction and Real Estate Department

Summary by Reporter Moon Jewon nest2639@