4 Billion Record High Cheongdam Jai Ultimately Cancels Contract... Suspicions of Self-Transaction

Exclusive 89㎡ Sold for 4 Billion Won... Canceled After Two Months
Local Realtors Say "Too Expensive, Likely Couldn't Pay Balance"
Criticism Arises Over Possible 'Self-Trade' Exploiting System Loophole

Cheongdam Xi in Cheongdam-dong, Gangnam-gu, Seoul (Photo by Asia Economy DB)

[Asia Economy Reporter Ryu Tae-min] The sale of the Cheongdam Xi 89㎡ (exclusive area) apartment in Cheongdam-dong, Gangnam-gu, Seoul, which was recorded at a transaction price 500 million KRW higher than the market price, has ultimately been canceled. Although the exact reason has not been disclosed, local real estate agents believe the deal fell through because the buyer failed to pay the remaining balance. Online communities are criticizing this as a possible case of a bicycle transaction that temporarily inflates the actual transaction price by exploiting loopholes in the system.

According to the Ministry of Land, Infrastructure and Transport’s real transaction price disclosure system on the 4th, the Cheongdam Xi 89㎡ unit, which was reported as sold for 4 billion KRW on August 4th, had its contract canceled on September 24th, about 50 days later. This transaction raised questions as it was contracted at a price 500 million KRW higher than the previous highest price of 3.5 billion KRW for the same area in May.

Nearby real estate offices believe that the contract was made at an excessively high price, leading the buyer to eventually cancel the contract. A representative from real estate office A in the area said, “At the time of the contract, the asking price for that area was around 3.5 to 3.6 billion KRW, so the transaction price of 4 billion KRW was suspicious,” adding, “It seems likely that the deal was canceled because the buyer could not prepare the remaining payment within the deadline.”

There is also speculation that the contract might have been temporarily canceled to obtain transaction approval since the apartment is located in a land transaction permission zone. A representative from real estate office B nearby said, “If the land transaction permission is not granted within the desired period, contracts are sometimes temporarily canceled and then resumed later.”

Online communities have raised suspicions that this might be a bicycle transaction aimed at inflating the reported highest price. One user commented, “It doesn’t make sense to have signed a contract and reported the transaction before even obtaining land transaction permission for a deal worth 4 billion KRW.” Other users responded with comments such as, “I expected the contract to be canceled because the price was excessively high,” and “Isn’t this a bicycle transaction?”

In fact, according to data received by Representative Jin Sung-jun of the Land, Infrastructure and Transport Committee from the Korea Real Estate Board, from February last year to September 30th this year, the number of canceled transactions disclosed in the real estate transaction system was 189,397 cases (5.7%) out of a total of 3,344,228 housing sales. When a housing sale transaction occurs, the actual transaction must be reported within 30 days. Currently, the system allows registration even if ownership has not been fully transferred, as long as the contract is signed, and there is no penalty for canceling the contract afterward.

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