Case Dates Postponed Due to Level 4 Quarantine Measures
5 out of 10 Courts in Seoul Adjourned... 37 Cases Delayed in Gyeonggi
Concerns Over Accelerated Accumulation of Listings Due to Bid Postponements
[Asia Economy Reporter Ryu Tae-min] As COVID-19 resurges and the Seoul metropolitan area enters social distancing level 4, real estate auction courts have also been consecutively halted.
According to the auction industry on the 22nd, the Supreme Court's Court Administration Office recommended frontline courts to postpone all hearing dates except for urgent cases starting from the 12th of this month, when level 4 quarantine measures were implemented. This is to prevent the spread of COVID-19 given the nature of auction courts where many bidders gather.
Accordingly, district courts in the metropolitan area scheduled to conduct auctions between the 12th and 26th of this month are also consecutively recessing. In Seoul, 5 out of 10 court auctions scheduled during this period postponed their hearing dates. In the Gyeonggi area, 37 out of 42 courts including Uijeongbu, Suwon, Ansan, and Goyang have recessed and postponed sale dates.
This is not the first time courts have recessed due to concerns over infectious disease spread. At the end of February last year, as COVID-19 began to spread in earnest, most auction courts nationwide closed for two weeks for the first time in history. In August of the same year, a second recess was implemented, and again in December due to the third wave of COVID-19.
Despite the recommendation to postpone trial dates, not all courts are closing. Each frontline court can decide at its discretion whether to accept the recommendation to postpone trials. However, given the nature of auction courts where bidders participate face-to-face, the industry expects that courts which have not yet decided to recess will likely accept the recommendation soon.
With the postponement of bidding dates, a large number of auction items are expected to accumulate. According to Gigi Auction, a court auction specialist company, a total of 1,353 auction items have had their bidding postponed due to this measure, of which 322 are apartments. In fact, last year, courts recessed three times, resulting in a total of 6,758 auction items in the metropolitan area alone having their bidding postponed. Especially, as most courts enter their summer recess period from the end of this month to early next month, the accumulation of auction items is expected to worsen.
Senior Researcher Lee Joo-hyun of Gigi Auction said, “Auction items typically take about 5 to 6 months from appraisal to bidding, and if bidding dates are delayed, the gap between the appraised price and the currently rising market price widens,” adding, “If the appraised price feels relatively cheaper, the average bid price may increase, eventually leading to a rise in the final bid price ratio.”
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