Ministry of Land, Infrastructure and Transport: "700 Cases of Housing Price Collusion Reported... Need for Supervisory Body with Strong Enforcement Authority"

Current Workforce and Organization Limit Illegal Activity Investigations Limitations
No Control or Monitoring of Law-Abiding Individual Transactions
However, Industry Concerns... Potential Market Principle Damage

Minister of Land, Infrastructure and Transport Kim Hyun-mi is touching her hair after finishing her remarks at the comprehensive real estate policy party-government meeting held at the National Assembly on the 15th of last month. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Moon Jiwon] The government has received over 700 reports of suspected housing price collusion to date but has been unable to conduct proper investigations due to limitations in organization and manpower, emphasizing the need to consider establishing a separate supervisory body.

Regarding concerns that an omnipotent authority might emerge and excessively restrict individual transactions, the government explained, "We will review institutional measures to prevent abuse of public authority."

On the 13th, the Ministry of Land, Infrastructure and Transport (MOLIT) stated, "The government is currently reviewing the establishment of a real estate market supervisory body to ensure the effectiveness of real estate measures such as speculation eradication, establish market transaction order, and enhance transparency."

MOLIT emphasized that as the real estate market has expanded recently, unfair practices disrupting market order?such as housing price collusion, false listings, and dissemination of false information?have increased and become more sophisticated, necessitating improvements to the current response system.

In fact, the 'Real Estate Transaction Order Disruption Reporting Center' established at the Korea Appraisal Board in February has received over 700 reports of housing price collusion so far.

MOLIT explained, "Due to limitations in systems, organization, and manpower, investigations are only conducted on certain types of collusion such as interference with licensed real estate agents' work," adding, "It is difficult to carry out necessary investigations on other types of collusion that constitute a large proportion."

The Ministry claims that although unfair practices like housing price collusion are rampant, it is challenging to investigate and punish all cases with the current government personnel alone.

In particular, MOLIT noted that real estate influencers active on online platforms such as YouTube are suspected of manipulating prices by recommending areas they have invested in, but due to institutional limitations, investigations and crackdowns are not easy.

MOLIT stated, "To detect unfair practices disrupting the market and conduct effective investigations and crackdowns, it is necessary to consider legislative supplements along with sufficient organization, manpower, enhanced enforcement authority, and the establishment of a separate supervisory body with expertise."

However, the real estate industry has significant concerns that the supervisory body the government is promoting could become an omnipotent organization.

There are also opinions that there is little need to create a new organization when the government is already monitoring illegal real estate activities through various agencies such as the Korea Appraisal Board, National Tax Service, and MOLIT.

On the contrary, there are considerable concerns that if the government holds enforcement and punishment authority and creates a structure to monitor individuals' real estate transactions and information, it could not only suppress transactions but also shake the fundamentals of market principles.

In response, MOLIT emphasized that even if a supervisory body is established, it will not monitor or control the real estate transactions of ordinary law-abiding citizens.

MOLIT explained, "The purpose is to eradicate illegal real estate activities and create an environment where citizens can trade real estate with peace of mind," adding, "Currently, investigations and crackdowns on private transactions are conducted only in the minimum necessary cases."

Furthermore, MOLIT stated, "During the review process for establishing the real estate market supervisory body, to ensure accountability, we will sufficiently consider institutional measures to prevent abuse of public authority, such as clarifying investigation and enforcement matters and strengthening information disclosure through a process of gathering opinions."