Government Takes Action... Launches Real Transaction Investigation on Low-Priced Apartments with Official Price of 100 Million Won

July Last Year to September This Year Nationwide Low-Cost Apartment Transactions
Illegal Activities Detected Through Real Transaction Investigations Including Fund Procurement Plans
Thorough Investigation of Local Speculative Investments Aimed at Short-Term Price Gains

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The Ministry of Land, Infrastructure and Transport announced on the 10th that it will launch a special investigation into actual transactions focusing on cases where corporations and non-local buyers are concentrating on purchasing low-priced apartments with a publicly announced price of 100 million KRW or less.

Low-priced apartments with a publicly announced price of 100 million KRW or less receive benefits such as acquisition tax surcharges, leading to concentrated purchases by corporations and non-local buyers since last year. Due to this, there have been many concerns that prices could surge rapidly in a short period, causing significant harm to local end-users.

According to the Ministry, from July last year to September this year, over approximately 1 year and 2 months, the total transaction volume of low-priced apartments was 246,000 cases. Among these, about 6,700 corporations purchased 21,000 cases (8.7%), and about 59,000 non-local individuals purchased 80,000 cases (32.7%).

This means an average of 3.2 purchases per corporation and 1.3 purchases per non-local individual.

The industry points out that the rapid increase in the purchase ratio by corporations is a speculative act for capital gains. In fact, the proportion of low-priced apartment transactions accounted for by corporations increased significantly from 5% in April to 7% in May, 13% in June, 14% in July, 22% in August, and 17% in September.

The Ministry emphasized, "Purchasing low-priced apartments multiple times does not immediately mean speculative demand or illegal activity," but added, "A thorough analysis and investigation of transactions by corporations and non-local buyers are necessary to protect end-users who may suffer damages due to price increases caused by such accumulation activities."

This investigation will comprehensively review the funding plans, sellers and buyers, transaction prices, and other factors of transactions by corporations and non-local buyers who purchased low-priced apartments from July last year to September this year to identify abnormal transactions.

The investigation will be conducted nationwide through a focused actual transaction investigation by the Real Estate Transaction Analysis Planning Team for three months until January next year, with the period extendable if necessary.

If violations of related laws such as up/down contracts, disguised gifts, or name trusts are confirmed during the investigation, the Ministry plans to notify relevant agencies such as the National Police Agency, National Tax Service, and Financial Services Commission for strict action.

Separately from the focused investigation of abnormal transactions, an in-depth survey on the recent surge in corporate purchases of low-priced apartments will also be conducted. The plan is to analyze various aspects such as the regions and properties where purchases are concentrated, methods of funding procurement, and the impact on transaction prices.

Kim Hyung-seok, Director of Land Policy at the Ministry of Land, Infrastructure and Transport, stated, "Through this special investigation of actual transactions, we will actively detect illegal acts such as speculation using corporate names and down contracts during accumulation processes," and added, "We will utilize the detailed survey on the recent surge in corporate purchases of low-priced apartments to identify areas for improvement and apply them to system reforms."

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