Court Auctions Closed Due to COVID-19... Average Number of Bidders is 3
The Resurgence of COVID-19 and Consecutive Real Estate Regulations Cool Down the Real Estate Auction Bidding Fever
[Asia Economy Reporter Onyu Lim] As the novel coronavirus infection (COVID-19) resurges, court auctions have once again shut their doors.
According to Gigi Auction on the 9th, the number of auctions conducted nationwide in August recorded 10,114 cases, a decrease of 2,698 cases compared to the previous month. Among these, 3,421 cases were successfully bid on, resulting in a winning bid rate of 33.8%. The number of successful bids also decreased by 970 cases compared to the previous month. However, the winning bid price ratio remained stable at 72.8%, a decrease of only 0.5 percentage points from the previous month.
The decrease in the number of auctions conducted is due to the resurgence of COVID-19. On the 24th of last month, the Court Administration Office recommended a two-week recess to courts nationwide. As local courts urgently decided to recess one after another, 4,981 auction cases, accounting for 30.9% of the 16,139 auction cases scheduled last month, had their bidding dates changed. The auction cases with rescheduled bidding dates are expected to be reassigned to dates after October.
The average number of bidders also decreased by 0.4 from the previous month to 3, marking a decline for three consecutive months. This is the lowest number since July 2012, when it was 3.1. The lowest average number of bidders on record was 2.4 in December 2008, during the financial crisis.
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The downward trend in the average number of bidders is expected to continue for the time being. Researcher Myungwon Oh of Gigi Auction said, "The government is maintaining its stance to strengthen real estate regulations and increase the burden on multi-home ownership, so the auction market has turned cautious." He added, "Moreover, court auctions only allow on-site handwritten bids, which inevitably requires many people to gather in the auction courtroom, highlighting the need for institutional innovation to prepare for the untact (contact-free) era."
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