Korea’s foreclosure auction price dips to 10-year low Aug, below half their fair value

2019.09.09 15:09:17 | 2019.09.09 16:47:48

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Foreclosure auction value has hit a 10-year low in Korea in another sign of the economy at its worst since the 2008-2009 global financial crisis.

The hammer ratio, or the ratio of sale price against fair market value, in competitive property offerings at bankruptcy courts across Korea averaged 62.6 percent in August, down 9.5 percentage points from the previous month, according to local property auction information provider GGAuction on Monday.

Some 4,034 properties were sold off at 11,898 foreclosure auctions, with bidder head per auction averaging 3.7.

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The August hammer ratio was the lowest since 61.8 percent in March 2009. The value of foreclosed commercial properties fell to 44.3 percent, down 21.4 percentage points and the lowest since GGAuction started compiling the data in 2001 as more self-employed businesses went bust and faced liquidation at a fire sale over the last year. The ratio of residential properties fell 2.4 percentage points while land was down 1.2 percentage points.

Regions that witnessed the steepest depreciation were North Gyeongsang and Gangwon Province, whose sale ratio against the fair market value plummeted 37.8 percentage points and 22.9 percentage points to 31.6 percent and 50 percent, respectively.

By Park In-hye and Kim Hyo-jin

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