Reports Surge Just Before Implementation... Will Land Transaction Permit Change to 'Immediate Effect'?

'5-Day Grace Period' Clause Criticized for Raising Housing Prices
Oh Se-hoon Suggests Fixing Loopholes

Assemblyman Song Seok-jun Proposes Bill
Seoul Mayor Oh Se-hoon and People Power Party's First Joint Bill

[Image source=Yonhap News]

[Asia Economy Reporters Kim Hyemin and Lee Hyunju] Seoul Mayor Oh Se-hoon is pushing to amend the system so that the Land Transaction Permission System can be 'enforced immediately upon announcement.' This follows the confirmation of side effects such as a surge in record-high prices during the five-day lag period. Since a legal amendment is necessary, Mayor Oh and the People Power Party have launched their first collaboration. The related bill was proposed by Song Seokjun, a People Power Party lawmaker and Chairman of the Special Committee for Real Estate Market Normalization.

According to Seoul City and the National Assembly on the 2nd, Representative Song introduced a bill last week to amend the Real Estate Transaction Reporting Act with this content. Song said, "The main point is to change the effective date from five days later to immediate enforcement."

Earlier, on the 29th of last month, Mayor Oh held a briefing and hinted at supplementing loopholes in the Land Transaction Permission System as part of real estate stabilization measures. Seoul City proposed improvements to the Land Transaction Permission Area designation system to the Ministry of Land, Infrastructure and Transport on the same day. At the same time, Mayor Oh requested the People Power Party to propose a bill. He also stated, "The proposal for the related legal amendment is underway in the National Assembly."

Representative Song's bill proposal is seen as a follow-up measure. Song said, "I heard about this during the work report," adding, "The Seoul City and the party will continue to work organically together."

Currently, the Real Estate Transaction Reporting Act stipulates that when a Land Transaction Permission Area is designated, it is announced the next day, and the enforcement takes effect five days later. This means there is a five-day grace period between the announcement and enforcement. While this grace period is interpreted as a way to prevent market confusion due to sudden regulations, there are criticisms that it rather fuels housing price increases.

[Image source=Yonhap News]

Mayor Oh strongly recommended system improvements because side effects such as a surge in record-high price reports were confirmed during the grace period after the designation of Land Transaction Permission Areas.

In fact, after Seoul City announced on the 21st of last month that redevelopment and reconstruction promotion complexes in Yeouido, Apgujeong, Mok-dong, and Seongsu-dong would be designated as Land Transaction Permission Areas, last-minute record-high transactions were actively conducted in these areas until just before enforcement. In Apgujeong-dong, Gangnam-gu, Misung 2nd Complex (exclusive area 140.9㎡) was traded for 3.98 billion KRW on the 23rd of last month, rising by 520 million KRW compared to January. Mok-dong New Town 2nd Complex in Yangcheon-gu (exclusive area 95.67㎡) exceeded 2 billion KRW for the first time on the same day. The same apartment with an exclusive area of 122.31㎡ was traded for 2.35 billion KRW two days later, setting a new record price.

When the government designated Jamsil-dong in Songpa-gu and Daechi, Samsung, and Cheongdam-dong in Gangnam-gu as Land Transaction Permission Areas last year, housing prices surged sharply in the short term due to the five-day lag.

A Seoul City official said, "During the five-day grace period, the market became buyer-favored, causing real estate market prices to rise and creating side effects that destabilize the market. However, since this requires a legal amendment, we do not have the authority, so we are proposing system improvements through various means."

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