[Reporter’s Notebook] Auction Craze Spreads: Will It Ignite a New Generation of Yeongkkeul Investors?

"When I watch YouTube, I see many people buying dozens of houses through auctions and making big money. I want to try making some money too."

This is what Kim, a student in his 20s, said last month at an auction academy in Yeoksam-dong, Gangnam-gu, Seoul. Recently, as a favorable wind has blown through the auction market, the number of 2030 generation entering the auction market like Kim is increasing. In fact, the winning bid rate in the Seoul apartment auction market has more than doubled in the past month, and 97 people have crowded to bid on a single apartment in Suwon, showing that the auction craze is serious. Due to high interest rates increasing the number of auction properties, another trend in financial investment has emerged.

The problem is that the proportion of young people among those putting houses up for auction and those jumping into auctions to make a profit is growing. In recent years, during the period of rising house prices, the 2030 generation who purchased homes by "Yeongkkeul" (borrowing to the limit) have been unable to bear the interest burden caused by rising interest rates, leading to a sharp increase in the number of properties coming up for auction. On the other hand, auction academies are bustling with 2030 students making up 70-80% of all attendees. Statistics on public and private auctions also show an increasing proportion of young people.

Typically, a surge in auction properties is considered a signal of a long-term real estate slump. Since transactions in the market are not happening, properties end up in auctions. Those who recklessly took on debt to buy homes dreaming only of a "big hit" during the housing price boom are now conducting what is called a "tearful clearance sale."

Nevertheless, most young people peeking into auction sites have weak grounds for entering the market. Their entire belief is based on advice from non-experts around them saying "now is the bottom" and the temptation of "auction jackpot" from famous YouTubers. However, these are the magic words that have been repeatedly echoed in the coin, stock, and housing markets that have shaken our society until recently. At least back then, interest rates were low, but now it is a completely different high-interest era. If things go wrong, the level of risk individuals must bear cannot be warned enough.

Recklessly jumping into auctions without detailed plans and market reflection can only repeat the failures of past Yeongkkeul borrowers. This applies to all investments. Even now, irrational overheating behavior must stop. You may think it won't happen to you, but there is no guarantee that no one will join the ranks of the new Yeongkkeul generation.