Gyeonggi Province designates land transaction permit zones five times to block speculative real estate schemes

[Suwon Ilbo=Park No-hun] As a result of Gyeonggi Province designating land transaction permit zones five times to block speculative demand from speculative real estate schemes, forest land share transaction volume in the province has decreased by approximately 31% compared to before designation, showing market stabilization effects.

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

The province analyzed forest land share transaction volume in the region over an 11-month period before and after the 2nd designation, which accounted for 86.6% of the total designated area across all five designations.

As a result, forest land share transactions from August 2020 to June 2021 following designation amounted to 25,483 cases, representing a decrease of 11,673 cases (31.4%) compared to 37,156 cases from September 2019 to July 2020, 11 months before designation.

A Gyeonggi Province official stated, "The land transaction permit zone designation system requires land purchasers to obtain permission from the mayors or county heads of their respective jurisdictions when purchasing land, thereby ensuring that actual users rather than speculators make purchases." The official added, "Through the designation of land transaction permit zones, we have achieved significant effects in blocking speculative real estate illegal activities."

Speculative real estate illegal activity refers to corporations using names such as 'OO Auction' or 'OO Development' purchasing land or forest land at low prices where actual development is difficult, then advertising them as highly profitable investments to recruit numerous investors, and selling land shares at inflated prices.

Meanwhile, the province concluded a 'business agreement on eliminating speculative real estate illegal activity' with Gyeonggi South and North Police Agencies last December and operates a 'speculative real estate illegal activity (damage) reporting center.'

Accordingly, the province provided lists of corporations suspected of share trading and speculative real estate activities, resulting in Gyeonggi South Police Agency arresting 15 individuals from 12 speculative real estate companies on fraud charges, with 4 individuals being detained and 24.2 billion won in illegal profits being subject to pre-indictment forfeiture and restitution preservation applications.

Additionally, among damage reports received at the speculative real estate illegal activity reporting center, 125 cases determined to have illegal suspicions have been referred for investigation to Gyeonggi South and North Police Agencies to date.

Concurrently, the province cautioned against illegal activities exploiting the designation of land transaction permit zones in speculative real estate areas.

According to the province's explanation, there have been cases where some speculative real estate firms pressured purchasers by saying, "Since it has been designated as a land transaction permit zone, if you purchase and wait, you will see returns several times higher in the future," and collected earnest money and balances.

A Gyeonggi Province official stated, "The land transaction permit zones designated as speculative real estate countermeasures focus on suppressing speculation rather than development demand, making it difficult to directly link them to land price increases, and land (forest) transactions within land transaction permit zones without permission are illegal." The official added, "We are responding firmly to speculative real estate illegal activities."