Speculative Real Estate Sales Soar - Land Purchased at 6 Times Official Assessed Value

[Suwon Ilbo - Reporter Park No-hun] #1. An 80-year-old Mr. A, a resident of Suwon, received a land investment proposal from B, an employee of a speculative real estate company.

B told A that the value of woodland in Namyang-eup, Hwaseong, would increase several times over within two to three years through urban development, and A purchased 3 plots (827 m²) for 180 million won.

Later, A discovered that the purchase price was six times higher than the official assessed value of the land, and also learned from Hwaseong City Hall that lifting the development restrictions on the land would be difficult.

#2. A 50-year-old Mr. C, a resident of Pyeongtaek, was pressured for sales performance by the speculative real estate company where he worked.

Based on favorable factors such as railroads and industrial complexes that he received from the company, C acquired woodland in Suji-gu, Yongin and Namjong-myeon, Gwangju, and recommended them to acquaintances as "good land."

However, the development news was false information, and the company he worked for also went out of business.

Ultimately, C lost both his assets and the trust of those around him.

Gyeonggi Province has requested police investigation into 45 reports of "speculative real estate illegal practices."

Speculative real estate illegal practices refer to purchasing land or woodland where development is difficult at a low price, advertising it as if substantial profits can be made, recruiting investors, and selling it at high prices.

Since December of last year, Gyeonggi Province received 52 damage reports through the "Speculative Real Estate Illegal Practices (Damage) Reporting Center," and after a screening process, requested police investigation into 45 cases from the Gyeonggi Southern and Northern Regional Police Agencies.

This is a follow-up measure to the "Business Cooperation Agreement to Eliminate Speculative Real Estate Illegal Practices" concluded with the Gyeonggi Southern and Northern Regional Police Agencies on December 9 of last year.

Following the agreement, the Province maintains close cooperation with the Gyeonggi Regional Police Agency and operates the "Speculative Real Estate Illegal Practices (Damage) Reporting Center." Reports can be submitted through cities and counties.

Hong Ji-sun, Director of Urban and Housing Affairs at Gyeonggi Province, stated, "Speculative real estate illegal practices exploit ordinary citizens' aspirations for real estate to gain unfair profits," and "This year, we plan to invest 100 million won to develop a speculative real estate transaction tracking system. We will make sure that speculative real estate cannot run rampant, at least in Gyeonggi Province."

Meanwhile, the Province investigated speculative real estate speculative concern areas last year and designated 244.42 km² as land transaction permit zones in four instances.

The Province has continuously recommended amendments to laws and ordinances to fundamentally resolve illegal or semi-legal practices of speculative real estate, and Congressman Hong Ki-won has submitted a draft amendment to the "Real Estate Transaction Reporting Act" as the primary proposer.