Government to Establish Permanent Real Estate Oversight Body with Prosecutors and Police... Also Conducting Inspections of Rental Business Operators (Comprehensive)

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance
5th Real Estate Market Inspection Meeting of Related Ministers

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the "5th Real Estate Market Inspection Meeting of Related Ministers" held on the 2nd at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Sejong=Asia Economy Reporter Kim Hyun-jung] The government will establish a permanent real estate monitoring organization, tentatively named the 'Real Estate Transaction Analysis Institute,' as a government agency with personnel from the prosecution and police. By the end of the year, it plans to inspect whether registered rental business operators comply with their obligations and take measures such as imposing fines and reclaiming tax benefits.

On the 2nd, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, presided over the 5th Real Estate Market Inspection Meeting at the Government Seoul Office and stated in his opening remarks, "We will create a permanent organization that continuously monitors the market, detects and exposes illegal activities, and swiftly enforces sanctions and penalties."

The name of the supervisory organization has been tentatively set as the 'Real Estate Transaction Analysis Institute.' It will be organized by expanding the existing illegal activity response team and dispatching specialized personnel from the Ministry of Land, Infrastructure and Transport, Financial Supervisory Service, National Tax Service, prosecution, and police. The institute also plans to strengthen its function of analyzing abnormal transactions, including financial information. Deputy Prime Minister Hong explained, "In designing its functions and authority, we actively referred to cases such as the Financial Intelligence Unit (FIU) and the Capital Market Investigation Team, as it will be a government organization established within the government, not an independent supervisory body outside the government."

Regarding rental business operators, whose system has recently been significantly downsized, the government will conduct a joint inspection with local governments over four months from September to December this year to check for violations of public obligations among registered operators. The target includes registered rental housing held by housing rental business operators as of July, and the inspection will cover compliance with rental obligation periods, rent increase restrictions (within 5%), and lease contract reporting. Deputy Prime Minister Hong emphasized, "For operators who violate public obligations, measures such as fines, deregistration, and reclaiming tax benefits will be taken."

[Image source=Yonhap News]

The government also plans to announce next week the locations and schedules for the pre-sale of 30,000 housing units in the 3rd New Towns, including Taereung CC. Deputy Prime Minister Hong said, "The expectation of having a home that can be moved into within a few years after winning the subscription will alleviate housing anxiety among actual demanders and ease sales demand, thereby calming market instability. We plan to finalize and announce the pre-sale locations and schedules for the 30,000 units in 2021, including Taereung CC, at next week's ministerial meeting so that actual demanders can feel the expansion of housing supply and plan their housing as soon as possible."

To communicate the government's real estate market policies more easily and accurately, the existing real estate policy information website will be expanded and revamped in September. Previously, the government prepared a 'Housing Lease Protection Act Guide' focusing on changes in lease relationships such as the right to request contract renewal and rent ceiling system, and provided it to institutional websites, local governments, and frontline real estate agents. On the 4th, comprehensive explanatory materials summarizing changes related to real estate systems will be posted on the websites of the Ministry of Economy and Finance, Ministry of Land, Infrastructure and Transport, Financial Services Commission, and other related ministries.

Deputy Prime Minister Hong also assessed the recent real estate market, stating, "Market stabilization effects are appearing." He said, "About a month after establishing laws and systems to eradicate speculative demand and preparing an unprecedented comprehensive policy package such as the August 4th supply plan, we judge that market stabilization effects are emerging. To firmly establish this real estate market stabilization trend, the already announced policy package must operate effectively, and strong responses must be taken against speculative demand, illegal transactions, and all disruptive activities that disturb the supply-demand market."

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