Despite the Launch of 'Anti-Speculation Secret Inspectors' in Non-Regulated Areas of the Capital Region...

Ministry of Land, Infrastructure and Transport Announces High-Intensity Planned Investigation by 'Illegal Activity Response Team' in Incheon and Southern Gyeonggi from the 13th
Thorough Investigation According to Strengthened Fundraising Plan Submission Rules Implemented That Day

Southern Gyeonggi Sees Balloon Effect from Government Measures
Weekly Apartment Sale Price Index in Osan City Doubles Recent Increase
Guri House Prices Rise 1.3%... Highest Increase Rate Since Statistics Began

Incheon Also Maintains Steady Upward Trend

Non-Regulated Areas Require Submission of Plans for Over 600 Million Won...
600 Million Won Is

[Asia Economy Reporter Lee Chun-hee] As regulations requiring the submission of funding plans for housing transactions have been significantly strengthened, the government has launched a high-intensity investigation to block illegal practices.

According to the government on the 13th, the new enforcement decree of the "Real Estate Transaction Report Act," which mandates the submission of funding plans for housing transactions over 300 million KRW in regulated areas and speculative overheated districts, and over 600 million KRW nationwide, was promulgated and came into effect on the same day. On the 16th, related enforcement rules specifying the list of supporting documents required for high-priced housing transactions in speculative overheated districts will also be promulgated and enforced.

The government plans to make the contents of the funding plan more detailed and require supporting documents to prevent illegal funding methods. For example, in the case of gifts or inheritance, previously only the total amount needed to be stated, but now both the provider of funds and the amount must be specified. The payment methods such as bank transfers, deposit or loan succession, and cash payments must be detailed, and in the case of cash payments, specific reasons must be indicated. This will enable the government to detect illegal funding through tax evasion and also to thoroughly understand the proportion of gap investments in the relevant areas.

The Ministry of Land, Infrastructure and Transport announced that as a measure following the enforcement of the new law, the "Real Estate Market Illegal Activity Response Team" will conduct high-intensity planned investigations in areas of concern for overheating in Incheon and southern Gyeonggi Province starting today.

Following the December 16 real estate measures last year, which significantly tightened financial channels in speculative overheated districts such as Seoul, a widespread balloon effect has occurred in the Gyeonggi and Incheon areas. It began with the so-called 'Su-Yong-Seong' (Suwon, Yongin, Seongnam). According to the Korea Real Estate Board, the cumulative apartment price increase rate in Suwon this year reached 11.27%. This is a sharp change compared to last year's cumulative rate, which fell by 0.30%.

Although these areas have somewhat stabilized following the February 20 measures, the balloon effect appears to be spreading to cities like Guri, Osan, and Incheon. Osan's weekly apartment sales price index rose 0.41% compared to the previous week as of the 24th of last month, then doubled to 0.98% last week (the 2nd), and surged to 1.95% this week (the 9th). Guri also recorded its highest-ever weekly price increase of 1.30% this week since the Korea Real Estate Board began compiling related statistics in 2012.

Incheon is also experiencing a continuous price rise. Since the February 20 measures, Incheon's weekly price increase rates have steadily maintained at 0.40%, 0.42%, and 0.38%. Yeonsu-gu, which includes Songdo International City, saw a 0.82% increase last week and a 0.77% rise this week, supported by the Seoul Metropolitan Area Express Train (GTX)-B line and a strong sales market.

Some argue that even if the government conducts funding source investigations, it will have little effect in non-regulated areas. Although housing transactions over 600 million KRW in non-regulated areas require submission of funding plans, the proportion of transactions at that price level is extremely low. According to the Ministry of Land, Infrastructure and Transport's real transaction disclosure system, among 1,665 apartment transactions reported in Osan City over three months from December 13 last year, there were no transactions over 600 million KRW. In Incheon, only 1,033 out of 15,662 transactions (6.6%) were above that threshold.

On the other hand, in Guri City, a regulated area, 1,036 out of 1,139 total transactions during the same period were over 300 million KRW and subject to funding plan submission, accounting for 91.0%. This means that most transactions in regulated areas are subject to funding source tracking. An industry insider said, "The government may also consider expanding regulated areas to enhance the effectiveness of funding source investigations."

This content was produced with the assistance of AI translation services.