False Contracts Leave a Record in Raising House Prices

Ministry of Land, Infrastructure and Transport Improves Housing Real Transaction Price Disclosure System... Also Discloses Terminated Transactions

[Asia Economy Reporter Kangwook Cho] Going forward, when a housing sales contract registered in the Housing Actual Transaction Price Disclosure System is canceled, the system will be improved to retain the record instead of simply deleting it. This is to prevent false contracts aimed at inflating house prices.

According to related industries on the 27th, the Ministry of Land, Infrastructure and Transport plans to improve and implement the Housing Actual Transaction Price Disclosure System starting early next month.

When a housing sales contract is reported, it is posted on the Actual Transaction Price Disclosure System, but currently, if the contract is canceled, the information is simply deleted. In the future, if a reported contract is terminated, instead of just deleting the information, the system will indicate that the transaction was canceled and disclose the date when the cancellation reason occurred.

This measure comes in response to concerns raised after a surge of record-high prices was reported in housing transactions in areas such as Gangnam, Seoul, with some fearing that there might be disruptive acts manipulating asking prices in the Actual Transaction Price Disclosure System. It is possible to falsely report a transaction at an exceptionally high price, then induce transactions at slightly lower but still relatively high prices compared to others to inflate house prices, and subsequently report that the earlier transaction was canceled, thereby disturbing the market.

The Ministry of Land, Infrastructure and Transport also judged that if existing transaction information is simply deleted from the system when a housing transaction is canceled, it would be difficult for the general public to determine whether market manipulation has occurred, and subsequent transactions could continue without transparency. Even if the transaction was not an intentional false deal, if a transaction concluded at a high price such as a record price is posted on the system and significantly influences subsequent contracts, the Ministry believes it is necessary to provide accurate information to consumers if that contract is canceled. The Ministry plans to implement the improved Actual Transaction Price Disclosure System starting from the 1st of next month after completing the improvement work.