Gyeonggi Province Designates Land Transaction Permit Areas for 5th Time to Block Speculative Real Estate Schemes

[Suwon Ilbo=Reporter Park Noh-hoon] Gyeonggi Province has designated land transaction permit areas a total of five times to block speculative demand for illegal real estate schemes, resulting in approximately 31% reduction in forest land share transactions within the province compared to before designation, demonstrating market stabilization effects.

According to Gyeonggi Province on the 6th, the province designated a total of 244.77㎢ as land transaction permit areas on five occasions: 5.58㎢ of forest land in Sangjuk-dong, Seongnam in March 2020, 211.98㎢ across 29 cities and counties and redevelopment/reconstruction project areas in Deogyang-gu, Goyang in July, 2.32㎢ in Hyeonduk District, Pyeongtaek in August, 24.54㎢ of forest land and farmland across 27 cities and counties in December, and 3.35㎢ of forest land and farmland across 18 cities and counties in June 2021.

The province analyzed forest land share transaction volume over an 11-month period before and after the second designation, which accounted for 86.6% of the total five-phase designated area.

As a result, from August 2020 to June 2021 following the designation, forest land share transactions totaled 25,483 cases, a decrease of 11,673 cases (31.4%) compared to 37,156 cases during the 11-month period before designation from September 2019 to July 2020.

A Gyeonggi Province official stated, "The land transaction permit area designation is a system that requires land buyers to obtain permits from the mayor or county governor of the jurisdiction to ensure purchases by actual users rather than speculative forces," adding "the designation of land transaction permit areas has achieved significant effects in blocking illegal real estate scheme activities."

Illegal real estate scheme activities refer to cases where corporations using names such as 'OO Auction' or 'OO Development' purchase land or forest land that is difficult to actually develop at low prices, then recruit numerous investors by advertising high profit potential, and sell land shares at high prices.

Meanwhile, the province signed a 'MOU for Eliminating Illegal Real Estate Scheme Activities' with Gyeonggi Southern and Northern Police Agencies in December last year and operates an 'Illegal Real Estate Scheme (Damage) Reporting Center.'

Accordingly, the province provided lists of corporations suspected of share trading and illegal real estate scheme activities, resulting in the arrest of 15 people from 12 real estate scheme companies by Gyeonggi Southern Police Agency on fraud charges, with 4 people arrested and 24.2 billion won in illegal profits submitted for pre-prosecution forfeiture and restitution preservation.

Additionally, the province has referred 125 cases from damage reports received at the illegal real estate scheme reporting center that were determined to have illegal suspicions to Gyeonggi Southern and Northern Police Agencies for investigation to date.

The province also warned of illegal activities by some real estate scheme operators exploiting the land transaction permit area designations in speculative areas.

Some real estate scheme operators have engaged in cases of coercing purchases by saying "since it has been designated as a land transaction permit area, if you wait after purchasing, you will see returns multiple times in the future," collecting down payments and final payments, according to the province's explanation.

A Gyeonggi Province official stated, "The land transaction permit areas designated as countermeasures against real estate scheme speculation focus on curbing speculation rather than development demand, making it difficult to directly link them to land price increases, and land transactions within land transaction permit areas without permission are illegal," adding "we are responding firmly against illegal real estate scheme activities."