Suwon Redesignated as Land Transaction Permit Zone...All 23 Cities in Gyeonggi Province for One Year

[Suwon Ilbo=Reporter Park No-hun] Suwon has been redesignated as a land transaction permit zone for foreigners and corporations by Gyeonggi Province.

As with the initial designation in October last year, it applies only to cases of acquiring land that includes residential buildings, and the deadline is April 30 next year.

On the 16th, Gyeonggi Province passed a review by the Gyeonggi Province Urban Planning Committee and announced on the 26th that it will redesignate all 5,249.11㎢ of 23 cities throughout the province, set to expire on the 30th of this month, as a land transaction permit zone for foreigners and corporations for one year until April 30 next year.

The province explained that the initial designation of the permit zone demonstrated market stabilization effects such as a decrease in residential transaction volume, but with price increases continuing, it is difficult to conclude that speculation risks have disappeared.

Specifically, between five months before the designation of the permit zone (June to October last year) and five months after (November last year to March this year), foreign residential acquisitions in the province decreased from 1,866 cases to 859 cases, and corporate residential acquisitions dropped from 6,362 cases to 592 cases.

However, the rate of change in real estate prices throughout the province has maintained an upward trend at 1.31% in March last year, 0.41% in October last year, and 1.28% in March this year.

The eight cities and counties excluded from the permit zone, as with the initial designation, are Yeoncheon County, Pocheon City, Dongducheon City, Gapyeong County, Yangpyeong County, Yeoju City, Icheon City, and Anseong City, which have low real estate transaction volumes from foreigners and corporations and are border and rural areas with low speculation concerns.

Under this redesignation, foreigners and corporations must obtain permission from the relevant city mayor when acquiring land that includes residential buildings within the land transaction permit zone.

Violations result in imprisonment of up to two years or a fine not exceeding 30% of the individual announced land price at the time of contract conclusion.

The specific permit targets are land transactions that include residential buildings, exceeding 18㎡ in residential areas and 20㎡ in commercial areas.

Current legal standards are 180㎡ and above for residential areas within urban areas, 200㎡ and above for commercial areas, and so forth.

The Enforcement Decree of the Real Estate Transaction Report Act allows the area standards to be reduced by a minimum of 10% or increased up to 300%, and to ensure the effectiveness of the system, this was applied at the lowest level.

Hong Ji-seon, Director of the Urban Housing Division of Gyeonggi Province, said, "With this redesignation measure, acquisition is allowed only for actual demand, and an obligation to use the land for the permitted purpose arises, which is expected to have the effect of blocking speculative demand from foreigners and corporations."