Real estate scams rear ugly heads with general elections coming up

Last Friday afternoon, The Dong-A Ilbo visited a rural area 20 minutes away from PyeongtaekJije Station in Pyeongtaek, Gyeonggi Province. A small leafy hill lay behind a paddy path only wide enough for one mid-sized vehicle. A 500-meter walk along the road led to a trail wide enough to accommodate a couple of adults.

A body corporate purchased this hill for 220 million won last July and split a quarter of the land to sell the parcels to 22 investors this January, raking in 390 million won. If the whole property were to sell, it would bring about 1.59 billion won to the company. This shows how the land price could increase eight times within half a year. “The investors whose money is tied up in the parcels ask me to help liquidate their real estate investments. It is not an easy deal because this land is hard to develop,” a nearby realtor said. “I was told that the corporate lured investors into believing that the land would highly likely be developed with the Great Train eXpress (GTX) line being extended and semiconductor manufacturing facilities to be built.”

Real estate scammers are posing a growing threat to investors as the government and politicians have promoted their plans and pledges to develop infrastructure systems such as rails, roads, and industrial complexes with the upcoming general elections. It is highly advised that investors make an informed, careful investment decision as deceitful developers tempt investors to buy a property, which they promote as a perfect deal but does not have any monetary value, for an overly inflated price while referring to political pledges for the general elections.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system and real estate platform Asil on Sunday, the top 10 Eup, Myeon and Dong areas with the most land trades done around the Seoul metropolitan area for the first three months of this year turned out to be Jangan-myeon, Ujeong-eup, Songsan-myeon, Paltan-myeon, Mado-myeon, Hyangnam-eup and Namyang-eup in Hwaseong; Anjung-eup in Pyeongtaek; Yangji-myeon in Cheoin-gu, Yongin; and Gangha-myeon in Yangpyeong-gun. All of these districts on the list are near areas referred to in the pledges to build or extend rail systems, or develop industrial complexes.

Experts warn that such speculative scams can rise with infrastructure investment pledges being churned out due to the upcoming general elections. “Even if a property is associated with any political pledge made, you are advised to visit the site and compare market prices in person,” said Park Won-gap, a senior real estate analyst at KB Kookmin Bank.


최동수 firefly@donga.com