Speculative Real Estate Development Suspected—Land Transaction Permitted Area to Be Designated Immediately

[Suwon Ilbo=Reporter Park No-hun] Gyeonggi Province analyzes land transaction data to identify areas of speculative concern, and when necessary, designates them as land transaction permitted areas to preemptively block speculative activities by planned real estate developers. Additionally, by continuously analyzing land transaction trends, Gyeonggi Province will operate a 'Planned Real Estate Alert System' for the first time in the nation, issuing stage-by-stage alerts such as 'caution' and 'danger' when transactions are suspected to be speculative activities by planned real estate developers.

Kim Jun-tae, Director of Urban Housing at Gyeonggi Province, held a press conference at the Provincial Government Briefing Room on the 4th and announced that the province has established 'Strengthened Measures to Eliminate Illegal Real Estate Transaction Practices' containing these contents, and will promote them starting this month. The key contents of the comprehensive measures can be divided into ▲ elimination of irregular sales (lot-splitting) by planned real estate developers ▲ strengthening crackdowns on false listings and price collusion on internet real estate platforms ▲ strengthening investigation of real estate transaction reports.

First, the province plans to preemptively identify and expand the designation of land transaction permitted areas as a measure to eliminate irregular sales (lot-splitting) by planned real estate developers. In March, the province designated areas around Sangjuk-dong, Sujeong-gu, Seongnam-si as a land transaction permitted area. The area is close to Seocho-gu, Seoul, and development projects such as Pangyo Techno Valley 2nd and 3rd Projects and Seongnam High-Tech Complex are underway nearby. At that time, the province explained the reason for designating the area as a land transaction permitted area, stating that planned real estate developers were persistently targeting speculative equity transactions in the area. In this manner, the province decided to preemptively identify areas of speculative concern by planned real estate developers through consultation and verification with cities and counties, and expand their designation as land transaction permitted areas. When an area is designated as a land transaction permitted area, if land of a certain size or larger is used without authorization or used for purposes other than those intended, penalties of imprisonment for up to 2 years or a fine equivalent to 30% of the land price according to the individually announced public land price at the time of contract execution are imposed.

The 'Planned Real Estate Alert System' is a system that uses Gyeonggi Province's newly developed 'Planned Real Estate Monitoring System' to determine whether speculative activities by planned real estate developers occur through a verification process by relevant city or county officials when land suspected of speculative transactions by planned real estate developers is detected. When the province detects land purchases by planned real estate developers, it will issue a 'caution' alert; when irregular sales (lot-splitting) by planned real estate developers is detected, it will issue a 'danger' alert and plans to disclose areas at risk of harm from planned real estate developers. Information disclosure will be conducted through the real estate information site operated by Gyeonggi Province, the 'Gyeonggi Real Estate Portal (https://gris.gg.go.kr)' and various promotional media.

The province plans to conduct intensive investigations of real estate transaction reports in areas where planned real estate developer equity transactions are detected, and will additionally consider designating them as land transaction permitted areas. Additionally, illegal activities by planned real estate developers revealed in the investigation process will be investigated in cooperation between the Gyeonggi Province Fair Special Judicial Police Unit and the Central Regional Tax Office.

In addition, the province will operate an 'Illegal Activities (Damage) Report Center for Planned Real Estate Developers' at the Gyeonggi Provincial Call Center (031-120) and will also promote revision of relevant laws and regulations to block the adverse effects of land sales by planned real estate developers.

Second, to strengthen crackdowns on false listings and price collusion on internet real estate platforms, Gyeonggi Province's Land Information Division, the 'Real Estate Transaction Order Disruption Report Center' established at the Korea Appraisal Board in February, and the provincial special judicial police will collaborate to conduct random crackdowns throughout the year. Additionally, to prevent disputes between sellers or landlords and licensed real estate agents, the province will require real estate agents to prepare a commission agreement when requesting intermediation, and will promote a 'Commission Agreement Preparation Campaign' to clarify real estate prices starting as early as May. The province also plans to produce promotional stickers to eliminate price collusion and false listings and distribute them to all real estate brokerage offices throughout the province.

Third, the province will strengthen the investigation of real estate transaction reports. The province explained that the 'Real Estate Transaction Report Act' was recently enforced, and the deadline for real estate transaction reports was shortened from the existing 60 days to 30 days, and real estate transaction reports must be submitted even when contracts are terminated or cancelled. Accordingly, the scope of areas requiring submission of funding plans has been expanded from speculative overheating zones with housing of 300 million won or more to regulated zones with housing of 300 million won or more and non-regulated areas with housing of 600 million won or more. The province plans to conduct special investigations into suspected false real estate transaction reporters in the first and second half of the year to thoroughly investigate violations.

Director of Urban Housing Kim Jun-tae said, "Gyeonggi Province has regarded illegal real estate transaction practices as a representative daily-life corruption issue since the launch of the 7th-term elected government, and is handling them strictly," and added, "This measure will establish fair and transparent real estate transaction order and will contribute to stabilizing the residential life of provincial residents."