Public Disgust Grows... Abnormal Signs Also Appear in Second New Housing Site Candidates

Land Transaction Volume Surges 5-Fold at Year-End
Share Transactions Rampant Like in Gwangmyeong-Siheung
"Investigation Scope Should Expand to Candidate Sites"
Government to Announce 2nd New Housing Sites in April for Smooth Supply

[Asia Economy Reporter Onyu Lim] Recent land transactions have surged in the second potential new housing site following Gwangmyeong-Siheung. Amid growing public distrust due to land speculation triggered by the Korea Land and Housing Corporation (LH), suspicious signs interpreted as speculation have been detected in the candidate sites, prompting calls to expand the scope of the government's joint investigation.

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 14th, the total number of land transactions in Gochon-eup, Gimpo-si, Gyeonggi-do, was recorded at 127 in December last year. Excluding this period, the average monthly land transaction volume in this area from 2019 to 2020 was about 24, meaning over 100 more contracts were made during that time.

Land transactions increased from 13 in January last year to 67 in July, just before the August 4 real estate measures, then decreased to 21 in September, peaked in December, and continued to exceed the average with 39 and 45 transactions in January and February this year, respectively.

Gochon, adjacent to Gangseo-gu, Seoul, has excellent access to Seoul and has been mentioned as a strong candidate for new housing sites along with Hanam Gambuk, Goyang Wonheung, and Hwajeon. Since a surge in land transactions is typically interpreted as a sign of speculation, there is a possibility that information about public development plans or investments related to this area was leaked.

In fact, in the Gwangmyeong-Siheung area where LH employees' speculation was confirmed, land transactions surged ahead of the government's policy announcement. According to the office of Kim Sang-hoon, a member of the People Power Party, 167 land transactions occurred in Garim-dong, Siheung-si, during the three months before the August 4 measures, and 30 transactions took place in the three months before the February 4 measures this year. Outside these periods, transactions were in single digits or nonexistent.

Especially in Gochon, there has been a recent trend of increasing fractional ownership transactions where land is divided and purchased. Of the 39 transactions in January, 14 were fractional, and of the 45 in February, 20 were fractional. Considering the average monthly fractional transactions last year were about six, this is a sharp increase. A local real estate agent near Gochon explained, "Since the end of last year, the number of outsiders looking for land has increased, and land prices that were less than 700,000 KRW per pyeong (3.3㎡) have now exceeded 1,000,000 KRW. Some landowners have withdrawn their listings due to suspicious signs, so transactions have become difficult recently."

Despite the 3rd New Town project facing a serious crisis due to the LH employee speculation controversy, the government plans to proceed with the announcement of the second new housing site next month to ensure smooth housing supply. The government emphasized, "We will make thorough preparations to prevent speculation concerns." However, as abnormal signs such as surging land transactions and rampant fractional ownership transactions have been detected, there are calls to expand the government's joint investigation, currently limited to existing housing sites, to include new housing site candidates.

Kim Tae-geun, chairman of the Civil Economy Committee of the Lawyers for a Democratic Society, stated, "I have heard that LH employees are acquiring advance information about new town candidate sites and purchasing land there," emphasizing, "A fact-finding investigation is necessary for the candidate sites as well."