Gangdong-gu Cracks Down on Speculative Real Estate 'Fractional Ownership' Schemes in Greenbelt Areas

Gangdong-gu in Seoul (District Mayor Lee Suhee) has launched an investigation and crackdown on speculative real estate firms engaging in ‘fractional ownership’ schemes, which have become rampant amid heightened expectations for the lifting of greenbelt (development-restricted area) regulations following the government’s announcement of new real estate policies.

Poster for Preventing Victimization from Land Speculation Share Splitting. Provided by Gangdong-gu.

According to the district on August 31, a speculative real estate company is suspected of selling shares of ownership in four forest land parcels within the greenbelt areas of Godeok-dong and Dunchon-dong to 168 individuals. The estimated profit from these transactions amounts to approximately 2 billion won. These land plots are subject to complex regulations, including designation as natural green areas, development-restricted zones, public-use forestry, and first-grade biotope status, making development virtually impossible.

Gangdong-gu has established a ‘Speculative Real Estate Damage Report Center’ at the district office and is conducting a systematic review of the parcels involved in suspicious transactions. If violations of the law are identified, administrative fines will be imposed; if there is suspicion of manipulated contract dates or fraudulent transaction reporting, the matter will be referred to the police for investigation. Additionally, if a licensed real estate agent is found to have received brokerage commissions exceeding legally permitted amounts or engaged in other illegal or unfair practices, the district will press charges or request an official investigation. Gangdong-gu has also entered into a business agreement with the Gangdong chapter of the Korea Association of Realtors to create a joint response system for monitoring transaction trends and sharing related information about speculative real estate activities.

The district will be the first in Seoul to mark ‘Speculative Real Estate Risk Areas’ on the Smart Seoul Map platform. This will provide residents with updates on risk area status, criteria for identifying speculative real estate dealings, and guidance on how to respond in the event of damage, enabling prospective buyers to access important information before entering into land contracts.

However, the risk area designations are provided for reference only and do not guarantee transaction feasibility or contract safety. Prospective buyers must check the Land Use Plan Confirmation Statement for zoning classification and development restrictions before contracting, and are advised to inspect the exact location and surrounding road conditions on-site.

District Mayor Lee Suhee emphasized, “Once damage from speculative real estate occurs, it is very difficult to reverse, and young people’s seed money or retirees’ life savings can be tied up for long periods. Please do not rush into deals with advertisements that promise excessive returns or claim that development is confirmed. Instead, seek advice first from the district office or a professional organization.”

Smart Seoul Map 'Speculative Real Estate Risk Area'. Provided by Gangdong-gu.

This content was produced with the assistance of AI translation services.