A surge in real estate random and forced auctions amid concerns about 'can housing'

Tenants who have not received their deposit back on time from the landlord are asking for a forced or random auction to get the deposit back. The court auction market has been frozen due to the slump in real estate prices. As a result, the rate and success of bids is decreasing. Deposits that can be returned if the bid price drops because of successive failed bids will also decrease. The Court Registration Information Plaza reported that 5897 registrations were made for the decision to hold a random auction of real property applications. This is 13.7% more than the September (5186) cases. There were 6,199 applications for the registration of a decision in order to start a compulsory real property auction nationwide during that same period. This is an increase of 26.9% (1317 cases) over October (4,882 instances). There are two types of auctions: voluntary auctions and compulsory auctions. A compulsory auction is one in which creditors apply to the court after receiving a judgment through litigation, etc. This is different from a random sale in which mortgagees such as financial companies apply immediately without any trial. Due to the increasing reverse jeonse crisis and landlords not being able to return jeonse deposits to tenants, 'forced auctions' are conducted by lawsuits. According to the Korea Real Estate Agency's'rental market siren,' the total amount of charter guarantee accidents in the country last November was 186.2 billion won. It increased 22.0% to 33.6 billion won, compared to October 2015 (152.6 billion won). Tenants have chosen to return their deposit through auction. However, it is believed that it is difficult to recover the entire amount via auction, as the market for court auctions is in a severe slump. Jiji Auction released the "December 2022 Auction Trend Report", which details the results of nationwide apartment auctions. Of these, 483 were successful. The percentage of successful bidders from auction bids was 27.5%. This is the third-lowest figure in history, after December (27.3%) and October (27.2%) in 2004. The national apartment bid price ratio, which is the ratio of successful bid price and appraised price, was 75.0%. This was the lowest level in 10 years (74.6%) The winning bid price for Seoul apartments was 76.5%. This is lower than the 80% mark in the last 9 years (79.6%). Lee Joo-hyun is a senior researcher at Jiji Auction. He stated that the rate of winning bids has been falling due to loan interest burdens due to high interest rates, and fears about future declines in house values.