[Asia Exclusive] "The Upward Trend Has Broken, but Housing Prices Are Not Stable Yet... Trust in Policy Is Needed"

Yang Gilsu, President of the Korea Association of Certified Appraisers
Consistent Policies Important for Long-Term Stability
Appraisers Contribute to Market Stability and Transparency

Yang Gilsu, 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 Jinhyung Kang aymsdream@

Yang Gil-su, President of the Korea Association of Property Appraisers, recently assessed the real estate market, stating that "the upward trend appears to have been broken." Since appraisers are responsible for evaluating the value of land and buildings at the forefront of the market, their statements carry significant weight due to their sensitivity to market fluctuations. However, President Yang pointed out that "it is still difficult to say that all instability factors have been completely eliminated," emphasizing the need for consistent policies and the restoration of public trust.

In an interview with Asia Economy, Yang explained, "When appraisers go out to the field for loan appraisals and investigations, they say the upward momentum has somewhat weakened," adding, "Housing demand had increased due to the rise in the number of households, and some people approached real estate from an investment perspective, such as gap investing, but recently, due to loan regulations, buying activity has slowed down."

According to recent statistics from the Korea Real Estate Board and frontline brokerage firms, buyer sentiment has weakened, and listings are gradually accumulating. However, Yang stated that the housing market has not yet entered a stable phase. He believes that only when various government policies, such as supply expansion, are steadily implemented and the public gains trust in these policies can the market gradually stabilize in the long term.

Yang identified the causes of recent instability in the real estate market as the "publicly disclosed actual transaction prices" and "uncertain asking prices." He pointed out, "Due to the nature of actual transaction prices, various stakeholders' circumstances can be involved, and if these prices are trusted as they are, it can disrupt the order of real estate transactions," adding, "The resulting anxiety and damage ultimately fall on the public." For example, even if an apartment in Apgujeong-dong, Gangnam, is traded for 8 billion KRW, it may be difficult to judge this as a legitimate transaction reflecting market conditions.

Therefore, Yang emphasized that the role of property appraisers is more important than ever in objectively determining the value of real estate transaction prices and enhancing the appropriateness of financial collateral in transactions. He said, "Appraisals are conducted by considering not only transaction cases but also various aspects such as the income and costs of the property," and added, "Through the role of appraisers who provide useful information during real estate transactions and determine the objective value of assets, they can contribute to market stability and transparency."

Yang also explained the need to resolve poor appraisals by financial institutions, which can adversely affect the real estate market and the national economy. He stated, "Poor collateral loans in the financial sector directly impact the financial economy, so accurate valuation of collateral is essential," expressing concern that "despite this, financial institutions are increasingly conducting internal evaluations without external appraisals when issuing collateral loans."

In fact, financial institutions, which are major clients of appraisers, have previously caused conflicts by requesting appraisal value information without formal requests or by presenting appraisal amounts in advance. Although some of these issues were alleviated by the appraisal business system improvement plan announced by the Ministry of Land, Infrastructure and Transport last year, problems still remain.

Yang said, "To ensure a sound financial economy and protect financial consumers, the appraisal industry and financial institutions will work together to find ways to coexist," adding, "We plan to actively engage in dialogue and cooperation with financial institutions to reduce internal evaluations and encourage the use of the appraisal system."

Expanding the appraisal industry's market and its mid- to long-term development are also goals during Yang's term. To this end, the association has established and is operating a Future Strategy Committee.

Yang stated, "We are not only discovering specific fields such as the compensation work consignment system, actual transaction price verification and adjustment system, and enhancing transparency of real estate funds to pioneer new markets, but also striving for institutional improvements," adding, "We plan to continue professional education to research new markets and enhance expertise in these areas."

◆ Yang Gil-su, President of the Korea Association of Property Appraisers - Biography

▶ Born in Daegu in 1965 ▶ Deokwon High School ▶ Korea University, Department of Agricultural Economics ▶ Certified Property Appraiser (10th class) ▶ Planning Committee Member, Peace Foundation ▶ Member, Property Appraisal Review Committee, National Tax Service ▶ President, Deokwon High School Alumni Association in Seoul and Gyeonggi Province ▶ Member, Public Enterprise Management Evaluation Team, Ministry of Strategy and Finance ▶ CEO, Hana Appraisal Corporation ▶ Chairman, Korea Real Estate Research Institute ▶ President, Korea Association of Property Appraisers