Seoul Investigates Alleged Housing Price Collusion Through KakaoTalk Group

The Korea Herald reported that the Seoul Metropolitan Government’s Civil Affairs Judicial Police Bureau announced Monday that it booked a man identified only as A for allegedly violating South Korea’s Licensed Real Estate Agents Act. Authorities accuse him of using a KakaoTalk open chat room for residents of a Seoul apartment complex to promote a minimum asking price for homes and discourage sales below that level.

According to the Korea Herald, investigators said the man repeatedly posted messages between June and November last year urging residents not to list apartments below a specific price for units in a complex identified only as B. Authorities allege the posts were intended to improperly influence market prices.

The report said investigators also accused the man of criticizing real estate agents who advertised lower-priced listings, referring to them with a derogatory term translated as “cage brokers” and portraying them as acting against the interests of apartment owners.

The Korea Herald further reported that the suspect warned residents not to trust agents offering lower-priced listings and repeatedly claimed, without reasonable grounds, that legitimate property listings requested by sellers were fraudulent. Authorities allege those messages portrayed ordinary transactions as efforts to depress housing prices and disrupted the business activities of licensed real estate agents.

Under South Korea’s Licensed Real Estate Agents Act, the Korea Herald reported, individuals who use online communities, notices or similar platforms to discourage brokerage activity below a specified price with the intent of manipulating the market can face penalties of up to three years in prison or a fine of as much as 30 million won (about $20,900).

According to the Korea Herald, Seoul conducted a special reporting campaign on suspected real estate price collusion from February through late June, concentrating on apartment-dense neighborhoods in the Gangnam, Seocho and Songpa districts, where authorities had received the largest number of complaints.

The newspaper reported that investigators focused on four categories of suspected misconduct: pressuring sellers to list properties above market value, discouraging lower-priced listings through online channels, refusing co-brokerage arrangements and posting false listings intended to influence market prices.

The Korea Herald said the Seoul city government is coordinating enforcement efforts with the Ministry of Land, Infrastructure and Transport, the Korea Real Estate Board and other agencies while encouraging members of the public to report suspected violations. Informants whose evidence leads to a conviction may be eligible for rewards of up to 200 million won after review, according to the report.

The Korea Herald quoted Lee Chang-seok, director of the Seoul Metropolitan Government’s Civil Affairs Judicial Police Bureau, as saying that rising apartment prices, limited housing supply and instability in the jeonse rental market have created conditions that allow online price-fixing efforts to continue.

Source: The Korea Herald