[Exclusive] Despite Pledge to "Eradicate Speculators," Police Refer Zero for House Price Manipulation

A Dedicated Investigation Team of 841 Formed
18 Individuals Under Investigation at the Request of the Ministry of Land
Difficulties in Proving Intentionality Remain High

Despite the police conducting a large-scale special crackdown on real estate crimes, it has been revealed that not a single case has been referred to prosecution for "artificially inflating transaction prices" through false reporting. This is because it is difficult to prove the intentional cancellation of contracts and the motive of obtaining profit. Although the government has pledged to eradicate "house price manipulation," critics point out that this has not translated into tangible results.

According to data submitted by the office of Assemblyman Seo Beomsoo of the People Power Party to the National Police Agency on January 9, there were zero individuals referred to prosecution for artificially inflating real estate transaction prices during the special crackdown on real estate crimes from October 17 to December 18 last year. Artificially inflating transaction prices involves reporting a property at a high price, then canceling the original transaction if nearby deals are concluded at that price, thereby artificially raising market prices. Under current law, violators can face up to three years in prison or a fine of up to 30 million won. Lee Sangkyung, First Vice Minister of Land, Infrastructure and Transport, stated in October last year, "Malicious false reporting of house prices is a criminal act that disrupts the real estate market and discourages people from buying homes," adding, "We will work with the National Police Agency and the National Tax Service to root out speculative forces."

A real estate agency in Songpa-gu, Seoul. Photo by Yonhap News Agency

The police are currently investigating eight cases (involving 18 individuals) referred by the Ministry of Land, Infrastructure and Transport as suspected instances of house price manipulation. However, it remains uncertain whether these will result in actual criminal penalties. This is because it is difficult to distinguish between contract cancellations due to loan regulations and intentional price inflation. A police official explained, "There are no cases of punishment or legal precedents," and added, "We are examining whether criminal liability can be established."

In this special crackdown on real estate crimes, the police have achieved results in other types of offenses. So far, 122 individuals have been referred to prosecution, while 51 were not. Investigations are ongoing for 609 individuals. By type, referrals included 67 for name lending and unregistered resale, 25 for corruption in reconstruction and redevelopment, 19 for other offenses, 5 for disrupting supply order, 3 for speculative real estate schemes, and 3 for illegal farmland speculation.

The total number of cases received by city and provincial police agencies was 484. The breakdown is as follows: 90 in southern Gyeonggi, 89 in Seoul, 59 in North Gyeongsang, 46 in Incheon, 43 in northern Gyeonggi, 31 in Daejeon, 26 in Busan, 22 in North Jeolla, 17 in Sejong, 11 in Gwangju, 10 in South Chungcheong, 9 in South Gyeongsang, 8 in Ulsan, 7 in North Chungcheong, 7 in Jeju, 5 in South Jeolla, 4 in Daegu, and 0 in Gangwon.

Looking at major crime cases, the North Jeolla Provincial Police referred three landlords and a union president to prosecution for offering approximately 240 million won to the union president to secure the rental apartment project rights for the Daejeon A District redevelopment union. Two of them were detained. The Busan Metropolitan Police referred two individuals to the prosecution for defrauding multiple people of about 1 billion won by falsely claiming that profits could be made by obtaining rental apartment permits for undevelopable forest land.

Previously, the National Investigation Headquarters of the National Police Agency formed a dedicated investigation team of 841 personnel, appointing the Director of the Investigation Bureau as the head of the Special Investigation Headquarters for Real Estate Crimes. The team consists of 11 from the National Investigation Headquarters, 136 from city and provincial police agencies, and 694 from police station investigation departments. The police plan to continue this large-scale crackdown on real estate crimes for 150 days until March 15.

Park Seongju, Chief of the National Investigation Headquarters, stated, "Illegal activities such as house price manipulation are reoccurring in some areas, infringing on the opportunities for genuine buyers to purchase homes," and added, "We will fundamentally block real estate crimes that cause harm to the public, such as illegal transactions and price manipulation."