Half of the Apartments with 'Transaction Cancellations' in Seoul Last Year Were at 'Record High Prices'

Assemblyman Cheon Junho of the Democratic Party Analyzes Ministry of Land's Actual Transaction Price System
Seocho·Gwangjin > Mapo > Gangnam Order
"Intentional Inflation of Actual Transaction Prices... Full Investigation Needed"

[Asia Economy Reporter Kim Hyemin] Last year, one out of every two apartment sales cancellations in Seoul involved a 'record-high price' transaction.

This is the first time that data analyzing all cancellations from last year has been released, amid concerns that contracts made at record-high prices and then canceled are one of the main causes of rising housing prices.

On the 22nd, Cheon Junho, a member of the National Assembly's Land, Infrastructure and Transport Committee from the Democratic Party of Korea, analyzed the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system and found that out of a total of 855,247 sales contracts last year, 37,965 cases (4.4%) were canceled. Nationwide apartment sales cancellations have been publicly disclosed since February 21 of last year.

Among the cancellations, 31.9%, or 11,932 cases, were registered at the highest price at the time. The region with the highest proportion was Ulsan. In Ulsan, 52.2% of canceled sales contracts were record-high price transactions. Seoul also reached 50.7%. This was followed by Incheon (46.3%) and Jeju (42.1%). Sejong, where housing prices have recently risen the most, also accounted for 36.6%.

Rep. Cheon said, "While it is possible that some transactions were genuinely canceled or that there were duplicate registrations or errors, suspicions have been raised that these might be false transactions intended to manipulate market prices."

Examining actual canceled cases reveals signs of attempts to inflate housing prices. In Ulsan Ulju-gun, Apartment A, a detached building, had 11 out of 16 transactions in March reported at record-high prices, but all 16 transactions were collectively canceled on the 25th of the same month. Of the 18 transactions that followed, 15 were reported at record-high prices.

Apartment B in Dong-gu, Ulsan, with 1,987 households, had 215 transactions last year alone. One out of every three transactions was at a record-high price, but cancellations were concentrated from November to early December. The sale price of this apartment, which was around 350 million KRW in June-July last year, rose to over 500 million KRW within half a year.

Based on local governments, it was found that cancellations after reporting record-high prices were mainly concentrated in the Seoul metropolitan area, including Seoul. Gwangjin-gu and Seocho-gu in Seoul had the highest rates at 66.7%, followed by Mapo-gu at 63.1% and Gangnam at 63%.

In the case of Apartment C along the Han River in Gwangjin-gu, Seoul, the apartment, which was traded for about 1.5 billion KRW until August last year, was reported at 1.76 billion KRW on the 18th of the same month, and an actual transaction was concluded at 1.78 billion KRW at the end of December. However, the transaction contracted in August was suddenly canceled on January 25 of this year, about five months later.

Similarly, Apartment D in Mok-dong, Yangcheon-gu, was traded at 1 billion KRW in May last year, then a sales contract was reported at about 1.2 billion KRW in October, and the price rose to 1.23 billion KRW in November. However, all transactions reported in October and November were subsequently canceled.

Rep. Cheon said, "While not all cancellations are like this, it cannot be ruled out that some speculative groups may have systematically made false reports to inflate apartment prices. We will demand that the Ministry of Land, Infrastructure and Transport conduct a full investigation to prevent citizens from suffering damages due to cancellations after record-high price reports, and request investigations if problems are found."

He added, "Unlike the Ministry of Land, Infrastructure and Transport's real transaction price system, real estate pages on portal sites and real estate apps do not reflect cancellations at all. Prompt action from the Ministry is necessary," he emphasized.

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