The government announced that it would investigate the source of the money involved in the purchase of expensive homes with a price of 900 million won or higher at all times to prevent real estate speculation. They also released plans to launch an investigation if the housing prices in areas designated for development show signs of overheating.

Hong Nam-ki, deputy prime minister cum minister of economy and finance spoke at the first ministerial meeting to inspect the real estate market at the government office in Seoul on August 5 and said, “No matter how much we increase the supply of housing units, if we cannot stop illegal transactions and speculation by people with multiple properties, it will be difficult to stabilize the real estate market.” He further said, “We will constantly investigate the purchase of expensive homes valued at 900 million won or more with suspicious funding sources and regularly release the results.”

Deputy Prime Minister Hong said, “By investigating real estate transactions, we confirmed activities that manipulated the real estate market, such as the purchase of multiple homes by one-person corporations, foreigners and gap investors (people who purchase homes with very little investment by leasing it to tenants for a lump-sum deposit or jeonse to make up for the lacking funds); the over/under pricing of homes commonly referred to as “up/down contracts”; and applications for new apartments under the name of another person--one who does not own a home.” He added, “We will constantly monitor areas designated for development projects in the government’s housing supply policy and immediately launch an investigation if signs of overheating are detected.” The government will expand the investigation on price fixing and illegal apartment purchases and will strengthen the intensity of investigations with a task force that will look into any omission of information on real estate transactions.

The government will also accelerate follow-on measures to the government’s housing supply policy. As for the public reconstruction projects, the Ministry of Land, Infrastructure and Transport and the city of Seoul will hold a meeting next week and draw up specific guidelines on a higher floor space index and the easing of the story height restriction. The two parties have different views on the easing of the story height restriction, so they are expected to discuss and select reconstruction sites where high-density reconstruction can be allowed. The deputy prime minister said, “To manage demand, we will quickly revise the subordinate laws related to the real estate bills.” He also said, “To increase supply, we will quickly negotiate with public agencies to purchase land for relocation, establish a metropolitan traffic network plan for areas such as Taeneung, and revise legislation, such as the Act on the Improvement of Urban Areas and Residential Environments, to expand reconstruction projects.”

The government will also begin discussions with relevant agencies for the development of the Taeneung Golf Club, the Seoul Regional Public Procurement Office, and idle land in the government complex in Gwacheon and the Korean National Diplomatic Academy. The government plans to begin construction in areas that are currently empty land as early as next year and also receive applications for housing.

The government will also modify its way of promoting real estate policies. It will hold a ministerial meeting to inspect the real estate market every week with relevant agencies including the Ministry of Economy and Finance, the Ministry of Land, Infrastructure and Transport, the National Tax Service and the Seoul metropolitan government. They will establish a swift response team under this meeting to stop the spread of any speculative information that could stir the market. Deputy Prime Minister Hong said, “We will basically put an end to activities that manipulate the real estate market and create an environment that will ultimately enable end users to buy a home when they need it by working hard.”