Real Estate Market Faces Strongest Sanctions... 'Real Estate Supervisory Agency' to Crack Down on Price Collusion

Real Estate Supervisory Agency Likely to Partially Assume Functions of Korea Appraisal Board

[Asia Economy Reporter Jang Sehee] There are expectations that the real estate market supervisory body being promoted by the government will be established as an independent entity with compulsory investigation authority. However, concerns have also been raised that such ex-post regulations may be insufficient to control the market.

According to the government on the 16th, the real estate market supervisory body will play a role in catching price manipulation, housing price collusion, and false listings. A government official stated, "This is to block various unfair practices that disrupt the real estate market," adding, "It will also take over some functions of the Korea Appraisal Board."

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said, "Regarding the disruptive acts on online platforms that have recently caused concern, joint special inspections are underway under the revised Licensed Real Estate Agents Act as of February this year, and for suspicious cases, internal investigations and criminal charges will be initiated." The government is taking the lead in cracking down on disruptive acts in the real estate market. Accordingly, the roles of the National Tax Service's task force for real estate transaction tax evasion response are also expected to be further strengthened.

The real estate supervisory body is expected to conduct comprehensive investigations not only monitoring unfair practices such as housing price collusion and false listings but also tax evasion and sources of funds. Given the broad scope of investigations, it is anticipated that the body will consist of at least around 100 personnel. As for the form of the supervisory body, options under consideration include placing it under the Prime Minister's Office or establishing it as an independent entity similar to the Financial Supervisory Service.

Some concerns have been raised regarding side effects related to the real estate supervisory body. This is because, in a situation where various regulations are already in place, a body with a strong ex-post management nature alone may have limitations in controlling disruptive market behavior.

Experts point out that management and supervision through administrative bodies have limitations. Professor Koo Ja-hoon of Hanyang University’s Department of Real Estate said, "Basically, it means supervising by looking at the market outcomes, but there are limits to controlling the market through ex-post supervision." He emphasized, "The structure is such that housing demand increases and housing prices rise because employment increases in Seoul. Fundamental problems such as resolving regional employment disparities need to be addressed."

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