[‘Hot Place’ Auction]③ “Much Cheaper Than Buying”… 2030 Generation Shifting from All-In Buying to Auctions

A real estate auction lecture taking place at a study cafe in Yeoksam-dong, Gangnam-gu, Seoul. Young students in their 20s and 30s are attending the lecture.
[Photo by Reader]

[Asia Economy reporters Tae-min Ryu and Min-jae Kwak] A study cafe in Gangnam-gu, Seoul. The 'Basic Real Estate Auction Class' held here was fully packed with students, leaving no empty seats. This is because a recent auction craze has drawn a large number of young students in their 20s and 30s. Kim Jin-gu, a lawyer running the class, said, "Until the first half of last year, only 5 to 6 people attended the auction class per month, but this year, more than 20 people have been coming." He added, "Especially, the proportion of young people in their early 30s among the students is very high."

The lecture ended late on a weekend evening, but the enthusiasm of the students eager to learn about auctions continued into a dinner gathering. While having dinner together, they shared knowledge and information about real estate auctions using specialized terms such as confirmed dates and opposability, which are somewhat unfamiliar to the general public. Student A (29), who is employed, said, "I used to study alone, but now I consistently participate because I can learn knowledge through lectures and interact with people interested in auctions."

Large Academies Also See ‘2030 Auction Craze’... Young People Flock to Public Sales

This auction craze can also be seen in large academy districts. A representative of a large academy in Gangnam said, "The number of people attending real estate auction classes has tripled compared to 2021," adding, "As young people's interest in real estate auctions has increased, most of the current students are in their 20s and 30s." A representative of a real estate auction specialized academy located in Nowon-gu also said, "In the past, middle-aged people in their 40s and 50s accounted for about 70-80% of the students, but recently, the proportion of young students has been rapidly increasing."

The statistics show the same trend. According to the 'Ownership Transfer Registration Applicant Status' data provided by the Court Registry Information Plaza on the 23rd, the number of buyers in their 20s and 30s who applied for ownership transfer registration through auctions in Seoul last month was a total of 87. This is the highest number since March last year (89), and compared to the lowest number in November last year (53), it increased by 34 people (64.1%) in just two months.

The same trend appeared in the public sales market. According to statistics from Onbid by KAMCO, among a total of 5,935 bidders who participated in bids for residential properties put up for public sale last year, 3,708 were young people under 40, accounting for 62.4%. This is 3.2 percentage points higher than the youth ratio of 59.2% in 2021. In particular, for apartments, the proportion of young people last year was 64.9%, which is 2.6 percentage points higher than the previous year (62.3%).

‘Home Ownership’ Through Auctions Instead of Sales or Subscription... Also Gaining Attention as Investment Products

A scene from a real estate auction lecture held at a study cafe in Yeoksam-dong, Gangnam-gu, Seoul. Young students in their 20s and 30s are attending the lecture.
[Photo by Reader]

The reason young people have turned their eyes to the auction market is to achieve 'home ownership.' Since the second half of last year, the apartment auction market has experienced a cold wave, and properties put up for auction have been repeatedly passed over. As the minimum bid price lowered due to consecutive failures, price competitiveness emerged, increasing demand to buy houses cheaper than market prices.

Actually, Lee Min-seop (30), who is taking auction-related classes online and offline, said, "Since subscription or sales have high entry barriers, I am preparing to purchase a decent house through auctions," adding, "Recently, the winning bid prices have clearly dropped, making it attractive to buy cheaply."

Young people who jumped into auctions for investment purposes were also noticeable. Office worker Kim Dae-young (29) said, "I became interested in auctions about 2-3 years ago and have been investing by actually winning bids," adding, "Recently, there have been many good properties in the auction market, so I even visited the auction court." He especially said, "It is difficult to manage volatile stocks or coins alongside my main job, so I turned to auctions," adding, "As long as I don't win bids at unreasonable prices, I think auctions are always a winning investment method."

‘Youth Auction Craze’ Brought by YouTube

The reason why the 2030 generation has become interested in real estate auctions is largely due to the influence of SNS. Lee Min-seop said, "By encountering finance-related content through YouTube and other SNS, my interest naturally led to auctions," adding, "Seeing influencers who succeeded through real estate auctions made me want to become like them." Park Hee-joo (31), who runs a personal business, said, "Through SNS, seeing peers winning auction properties or making large profits from price differences sparked my curiosity about auctions."

Joo-hyun Lee, a senior researcher at Gigi Auction, explained, "Until a few years ago, real estate auctions were strongly regarded as the domain of middle-aged people, but recently, many young people have been entering," adding, "This is because interest in real estate has increased due to the recent rise in house prices, and the perception that auctions are not bad has grown through SNS." He continued, "However, consulting firms or academies often provide inaccurate information to attract customers," advising, "Be careful not to blindly trust such information or make reckless decisions such as joint investments."