Land Speculators Exploit New City Development Hopes to Defraud Investors

The Daegu District Court last year sentenced a land speculation scheme operator, identified as Mr. A, to four months in prison with a one-year suspended sentence on fraud charges. Mr. A, who served as CEO of a company established for planned real estate development, was accused of selling land in Pyeongtaek, Gyeonggi Province to investors by promoting it as if prices would rise sharply in the short term through sales staff.

Mr. A lured investors by telling victims, "Samsung Electronics' Pyeongtaek campus factory is scheduled to be completed nearby, and a U.S. military base will also relocate there. Entertainment facilities for U.S. military personnel are planned, so the land will be rezoned for residential use and roads will be constructed."

However, the land was registered as paddy field farmland, meaning it had little investment value without farmland conversion permits and development permits under the National Land Planning and Utilization Act. Despite this, Mr. A emphasized development prospects to attract numerous investors, dividing and selling the land in a practice known as "splitting" to generate profits. Mr. A had previously received suspended sentences in 2021 and 2024 for similar fraud schemes involving land in Asan, South Chungcheong Province, Seogwipo, Jeju, and Pyeongtaek.

Land speculation schemes that purchase farmland near development hotspots—such as new cities, new highways, and Greater Seoul Express Railways (GTX)—then divide shares and recruit investors for capital gains remain actively operating. Fraudulent practices continue, including disguising farmland as regular residential land for sale or pre-selling land not yet acquired.

An analysis by The Seoul Economic Daily of Korea Real Estate Board statistics found that Sejong Special Self-Governing City had the highest mismatch rate between land location and buyer residence among all metropolitan governments last year. Of 11,106 land parcels traded in Sejong last year, 4,764 parcels—or 42.71%—were purchased by buyers from outside the jurisdiction. By area, non-residents purchased 1.67 million square meters, representing 54.6% of the total 3.056 million square meters traded.

Yangpyeong County, where the Seoul-Yangpyeong Expressway completion was announced, showed 41% out-of-area purchases. Hanam City, which received news of Subway Line 3 extension and GTX-D, also recorded high non-resident purchases at 39%.

The higher the proportion of non-resident land purchases in areas with development prospects, the more land speculation schemes exploit these situations. In such regions, some operators submit false agricultural plans to deceive government agencies, obtain farmland acquisition qualification certificates, and proceed with sales.

A Sejong-based land speculator identified as Mr. B established five real estate companies and agricultural corporations, stated "agricultural management" as the acquisition purpose, and submitted false agricultural management plans and farmland acquisition qualification applications to local township offices. After receiving certification on the same day of submission, Mr. B sold shared stakes in farmland 13 times, earning profits in the hundreds of millions of won.

A licensed real estate broker in Gyeonggi Province said, "Buyers suffered significant losses due to land speculators who purchased Gwangmyeong farmland at low prices and sold it above market rates. These schemes continue to dominate the market." The broker added, "Recently, some even provide property registration, so elderly people unfamiliar with the Farmland Act are primarily victimized."

At the end of last year, land speculation activities promoting greenbelt land sales surged in Hanam, Gyeonggi Province. As the government mentioned lifting greenbelt restrictions to expand housing supply, previously dormant speculators resumed operations.

Their promotional phrases were simple: "Scheduled greenbelt deregulation area," "Adjacent to new city," and "2-3x returns guaranteed." Though unverified, such claims proved sufficient to deceive investors.

A real estate agency official in Hanam said, "Land prices have risen significantly since rumors of greenbelt deregulation spread two to three years ago. Land speculators seem to be exploiting this gap."