Last year, the number of collective buildings put up for compulsory auction hit an all-time high.
According to the court's Registration Information Plaza on the 11th, the number of collective buildings nationwide that filed for a registration of a decision to commence compulsory auction last year was 38,524, up about 10.7% from the same period a year earlier. Collective buildings refer to real estate such as apartments, low-rise apartment (row and multi-household housing), officetels, and shopping centers.
This is the largest annual figure since related statistics began to be compiled in 2010. Nationwide, collective buildings that filed for registration of a decision to commence compulsory auction remained below 30,000 each year through 2023, then exceeded 30,000 for the first time in 2024 (34,795), and set a new record high last year.
By region, Gyeonggi had the most with 11,323. It was followed by Seoul (10,324), Incheon (5,281), Busan (2,254), South Gyeongsang (1,402), and North Jeolla (1,236). Last year was the first time the number of collective buildings in Seoul and Gyeonggi that filed for registration of a decision to commence compulsory auction topped 10,000.
A considerable number of the collective buildings that went to compulsory auction appear to be multi-household and row houses (low-rise apartment) affected by the fallout from jeonse fraud. As applications for compulsory auction by victimized tenants increased and the Korea Housing & Urban Guarantee Corporation (HUG) actively moved to win bids for dwellings damaged by jeonse fraud, the rise in the number of properties sold appears to have had an impact. The increase in compulsory auctions is also a typical pattern during an economic downturn.
The number of collective buildings that were sold (awarded) through compulsory auction last year and filed for transfer of ownership registration also reached 13,443, surpassing 10,000 for the first time since statistics began in 2010. Seoul (4,398), Gyeonggi (3,067), and Incheon (2,862) all set record highs on an annual basis.
Nationwide last year, the number of collective buildings that filed for registration of a decision to commence voluntary auction and those that filed for transfer of ownership registration through voluntary auction stood at 49,253 and 24,837, respectively. A voluntary auction is a process in which, if a debtor who borrowed money with real estate as collateral fails to repay principal and interest for a certain period, the creditor holding the collateral (typically a bank or other financial institution) puts the real estate up for court auction. It is directly affected by the lending rate and differs from compulsory auction in that it can be filed without an executive title.
The number of collective buildings that filed for registration of a decision to commence voluntary auction last year fell 11.1% from a year earlier, but those that filed for transfer of ownership registration through voluntary auction rose 17.4% over the same period. The number of collective buildings that filed for transfer of ownership registration through voluntary auction increased for three consecutive years from 2022 to last year (12,860 → 13,729 → 21,159 → 24,837).
It is interpreted that some homebuyers who sought to purchase their own homes by "yeongkkeul" ("scraping together even one's soul") during past periods of sharp home price gains gave up ownership as prolonged high interest made the burden of interest unbearable.