Properties change hands at low prices between related parties

High-rise apartments in Busan. [JOONGANG ILBO]

Property transactions between related parties are being made at unusually low prices, raising the possibility that money is being moved around by the owners for reasons not completely commercial.

The transactions may be affecting the property market. Low sale prices can hit the sentiment of buyers of other properties.

Last month, a 217-square-meter (2,336-square-feet) apartment on the 42nd floor of Daewoo Trump World Marine in Busan was sold for 2.5 billion won ($1.75 million), according to a report made to the Land Ministry.

That’s lower than the 2.7-billion-won government assessed value, which is used for calculating taxes.

The apartment is one of the two penthouse in the same building.

The sale didn't go through a real estate agent. It was a direct trade between buyer and seller.

According to the transaction record, the apartment, which was previously owned by a corporation, was sold to three individuals who are in their 30s and 20s. No financing was involved.

Due to the name similarities, the owner of the corporation may be related to one of the three buyers.

The corporation purchased the apartment for 1.7 billion won at the end of 2017.

A 242-square-meter penthouse next door sold for nearly 3.3 billion won in January.

A penthouse in a different building in the same complex sold for 5.5 billion won last month.

The penthouse that sold for 3.3 billion won was sold by an individual to a company run by the seller. The seller has outstanding debts of 2.3 billion won.

In May, a 209-square-meter apartment on the 76th floor of Haeundae Doosan We’ve the Zenith complex in Busan was sold for 3.2 billion won.

It was a direct transaction between a company and the owner of the company. The company purchased the apartment for 3.3 billion won in 2009.

An apartment of the same size in the same complex sold at 3.7 billion won through a real estate agent in the same month.

The company that sold the apartment had debts of 2.2 billion won.

A 144-square-meter apartment in LCT sold for 2.2 billion won in April. It was also another direct transaction without any real estate agency involved.

A month later, an apartment of the same size at LCT sold for 3.8 billion won through a real estate agency.

According to the Seoul city government, last month only 389 apartments were sold in the city, down from January's 1,092 units.

In hopes of preventing the real estate market from collapsing, the government recently relaxed some restrictions.

While transactions in Seoul are strictly regulated, including limits on loans, in some areas, the restrictions have been lifted.

BY AHN JANG-WON, LEE HO-JEONG [lee.hojeong@joongang.co.kr]