"Reporting High Prices and Canceling Contracts"... Government Launches Special Investigation into 2.5 Years of Seoul Apartment Transactions

Ministry Selects 425 Suspected Cases of Price Manipulation in Seoul Apartments
"Growing Distrust Over Distorted Housing Prices... Strict Measures Needed"

The government has launched a special investigation into apartment transactions in Seoul suspected of so-called "price inflation." Authorities believe that artificial price boosting is one of the factors behind the recent surge in housing prices in certain areas.

The Ministry of Land, Infrastructure and Transport announced on September 26, 2025, that it is investigating 425 Seoul apartment transactions reported as canceled between March 2023 and last month, which are suspected of "price inflation." Price inflation refers to the practice of reporting a property at an inflated price, then canceling the original transaction after nearby properties are sold at that price point. Such false reporting is an illegal act that can mislead buyers with inaccurate market information and cause harm. Under the Real Estate Transaction Reporting Act, violators face up to three years in prison or a fine of up to 30 million won.

According to the Ministry, the number of canceled Seoul apartment contracts in the first half of this year reached 4,240, more than triple the 1,155 cases during the same period last year. This increase is attributed to the rise in total real estate transactions from 27,753 to 46,583 during the same period, as well as the growing use of electronic contracts. Electronic contracts offer a preferential loan interest rate of 0.1 percentage points, leading to a significant rise in properties being re-reported under electronic contracts after canceling the original agreement.

Actual transaction notice at a real estate agency in Mapo, Seoul. June 27, 2025 Photo by Yoon Dongjoo

Of the canceled contracts, over 90%-a total of 3,902 cases-involved properties that were re-reported with the same parties, listings, and prices. The remaining 8%, or 338 cases, were either not re-reported or involved price changes. The Ministry explained, "Given the growing public distrust over distorted housing prices, we have determined that strict measures are necessary and have initiated this special investigation."

The investigation will mainly focus on whether contract deposits were paid or returned, as well as the reasons for cancellation. The Ministry aims to complete the investigation by the end of this year. If necessary, the scope or duration of the investigation may be expanded. For cases suspected of legal violations, the Ministry will request police investigations and will also consider institutional improvements to prevent such illegal activities.

Park Junhyeong, Director of Land Policy at the Ministry, stated, "We will eliminate housing price distortions caused by false transactions and create an environment where genuine buyers can trade with confidence."

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