“LH employees moved at the same time as speculators”… During the time when the land was bought in Siheung, the proportion of foreigners’ purchases also skyrocketed.

Input 2021.03.09 11:30

It was found that the employees of Korea Land and Housing Corporation (LH), who are suspicious of speculation in Gwangmyeong and Siheung, began to purchase land in earnest at the same time as foreign investors. After hearing rumors that the purchase behavior of LH employees was a planned site for new city development, it showed a similar pattern to the so-called’speculators’ who aimed for land compensation. As the controversy grew, real estate experts agreed that it was difficult to avoid accusations that LH employees had even boosted demand for speculation from outsiders with the development information spread.

According to the data submitted by Siheung City, the office of the Democratic Party for exclusive use on the 9th, four LH employees jointly purchased 3996㎡ of land in Gwarim-dong, Siheung in June 2019. Turned out to be one. However, unlike the plan, it is speculated that they were aiming for compensation by planting willow saplings.

During this period when LH employees bought land in Gwangmyeong and Siheung in earnest, it was found that foreign investment demand also moved. According to the land transaction status of the Korea Real Estate Agency, in June 2019, there were a total of 1193 land transactions in Gwangmyeong. Of these, 655 cases, which account for 54.9%, are purchases from outsiders. During the same period, 1133 transactions, or 35.0% of the total 3246 cases, were foreign transactions. At this time, out of the total 6,935 land transactions in Gyeonggi-do, foreigner transactions were 18,733, accounting for only 30.0%.

In both regions, the proportion of outsiders’ transactions in June was the highest on a monthly basis for that year. In the case of Gwangmyeong, the proportion of outsiders in 2019 was ▲35.1% in January ▲43.5% in February ▲31.8% in March ▲41.1% in April ▲42.7% in May. It was generally similar to 2018 (28.3-42.0%). During the same period, the proportion of outsiders in land transactions in Siheung remained at the level of ▲36.0% in January ▲30.9% in February ▲31.5% in March ▲31.7% in April.

June 2019, when the proportion of foreign transactions between Gwangmyeong and Siheung was high, was just after the second announcement of the 3rd new town. On May 7th of that year, the Ministry of Land, Infrastructure and Transport newly designated two new town housing sites, including Changneung in Goyang, Gyeonggi Province, and Captain Bucheon. Until then, the plans for the new towns of Gwangmyeong and Siheung were not announced, but investors bought the land while betting on the possibility of designation in the future.

It was found that land purchases by foreigners in Gwangmyeong and Siheung increased around December 2018, when the first 3rd new city was designated. At the time, the presentation areas were Namyangju Wangsuk, Hanam Gyosan, Incheon Gyeyang. In December 2018, the proportion of land transactions by foreigners in Gwangmyeong was 42.0%, and the proportion of foreigners in the land transactions of Siheung in November, which was passed on, was 37.0%. Again, in both regions, the share of purchases from outsiders on a monthly basis was the highest during this period.

Experts point out that it is a typical speculative technique to preempt the next announcement site when a new city development issue arises. Dae-Jung Kwon, professor of the Department of Real Estate at Myongji University, said, “As the information leaked by LH employees from the real estate agency near the site to be developed spreads among investors, it seems that the proportion of purchases increased rapidly during the same period.” “You will not be free from criticism that you have encouraged it.”

“The direct investment of LH employees who can access internal information is a big mistake,” said Go Jong-wan, director of the Korea Asset Management Research Institute. “Moreover, it is more problematic that there are many outsiders who purchased land with the information they exposed at the same time.”

He continued, “Because there is a higher probability of being free from surveillance and having more funds than public officials, if certain information is obtained, aggressive investment will be made.” I can do it.

On the other hand, among real estate experts, there is also an opinion that it is necessary to modify the system such as differentiating land compensation in order to prevent the demand for land investment, which is indiscriminately rushing to designate a new city.

Seo Jin-hyung, chairman of the Korean Real Estate Association (Professor of Kyungin Women’s University) said, “Looking at the possibility of developing undeveloped areas in the metropolitan area, it seems that investment demands have entered Gwangmyeong or Siheung in advance.” “It’s also a way to differentiate the rewards.”

Joon-Seok Ko, adjunct professor at Dongguk University’s Graduate School of Law, said, “If foreigners receive land compensation below the standard market price, the reason for investment disappears, so the demand for foreigners can be prevented.” “Because it is, you will have to carefully weigh the pros and cons,” he said.