Young Koreans turn to court auctions as Seoul prices soar

Kim Yu-ji, 26, let out a sigh. "It failed," she said. "I had high hopes."

It was the morning of Aug. 24 in Courtroom 101 of the Seoul Eastern District Court in Songpa District. The property on the block was a low-rise multifamily property commonly called a "villa" in Korean, located in Amsa-dong, Gangdong District, and appraised at 504 million won ($370,000). It drew 11 bidders, more than any other case heard that day. Kim had taken the morning off to sit beside her older brother, Kim Beom-jun, 31, who was making his first bid at a property auction. He had put his chances at about 80 percent.

Then the judge announced the result. "The highest bid in this case is 436.07 million won," he said. Kim Beom-jun had bid 370 million won, falling 66.07 million won short of the winning bid. Neither of them lingered over it. They had to return to work that afternoon.

They were not the only young bidders in the room. About 10 people in their 20s and 30s were there, among them Kang Ji-yun, 27, who lost a bid for a villa in Garak-dong.

"Homes in Seoul are so expensive that I looked for a way to buy as cheaply as possible, and that is how I learned about auctions," she said. "I lost today, but I am not too disappointed because gaining experience may eventually lead to a good opportunity and a good home."

Rising home prices and tightening property regulations are pushing a growing number of Koreans in their 20s and 30s toward the courts. Without help from their parents, they are nowhere near buying an apartment in Seoul, even if they stretch their finances to the limit.

So they buy a villa at auction instead and wait for an opportunity to trade up. The property auction market is complicated and risky, and for years it belonged to middle-aged specialists who knew how to read it. The question is why young people are now entering the market.

Court data showed the same trend. From January through July, 20,619 buyers registered ownership of auctioned properties, according to the Court Registry Information Plaza. Of those, 5,556, or 26.9 percent of the total, were aged 19 to 39, an increase of 18.3 percent from the same period a year earlier. The portion of buyers aged 19 to 29 grew faster still, up 24.8 percent against an average of 17.2 percent across all age groups. Over a longer period, the shift is clearer. Buyers ages 19 to 39 rose from 5,759 in 2021 to 8,361 last year.

Two forces are behind the change: rising apartment prices and the tightening of lending rules that followed.

"With apartment prices continuing to rise and lending rules tightening, prospective homebuyers appear to have turned to auctions in search of a more affordable way to buy," said Lee Ju-hyun, a senior expert adviser at GG Auction.

Available jeonse listings, Korea's lump-sum deposit rental system, have dwindled as well, adding to the pressure.

An official at Master Auction Academy in Suwon, Gyeonggi Province, said about half of the school's recent new students are in their 20s and 30s, indicating growing interest among young people.

"As jeonse listings disappear, people seem to be moving into auctions with the view that they might as well buy," the official said.

A real estate agent in Hwagok-dong, Gangseo District, described the same shift.

"Newlyweds mainly used to ask about jeonse homes, but purchase inquiries have also increased over the past four or five months," the agent said.

Homes to live in, not to flip

The young buyers entering auctions now want homes to occupy. Through the first half of last year, the auction market drew younger bidders pursuing gap investments, in which a buyer covers most of a property's price with an incoming tenant's jeonse deposit, and short-term flipping of low-rise multifamily homes. Lending rules were looser in the auction market then, and no occupancy requirement applied.

The trend changed with the lending measures announced June 27, 2025, which took effect the following day. The rules capped loans used to pay the remaining purchase price after a successful auction bid at 600 million won, and required winning bidders to move into the home within six months. The market shifted toward cash-rich buyers and owner-occupiers.

Buyers in their 20s and 30s rarely have much cash, but they can qualify for the first-time homebuyer loan, which favors those who have never owned a home. The loan also requires the buyer to live in the home.

"When real estate regulations are as extensive as they are now, financing is crucial, and young people without a home have an advantage," said Sim Yu-sun, director of Eduwill Real Estate Academy. "There is a trend of young buyers using financing in the relatively accessible auction market to obtain homes they can occupy themselves."

What they can actually afford are lower- to mid-priced apartments and low-rise multifamily homes on Seoul's outskirts — a map drawn by budget constraints. According to GG Auction, a firm specializing in court auction and public sale data, winning bids for Seoul apartments have exceeded 100 percent of appraised values for four consecutive months, which means the traditional auction discount has effectively disappeared.

"Buying an apartment in major parts of Seoul requires at least 300 million won to 400 million won of your own money, so entry is simply out of reach," Kim Beom-jun said. "I looked at a villa as a realistic compromise."

Some do win. Noh Hyun-jung, 24, known online as "Hyunfree02," bought a low-rise multifamily home in Gangseo District late last year for nearly 200 million won, about 20 percent below prices for comparable homes nearby. The property sits in an area being promoted for redevelopment under Moa Town, Seoul's small-scale neighborhood renewal model. Her approach is what Koreans call "momtech" — living in a modest property while waiting for its value or redevelopment prospects to improve.

"I am highly satisfied with the proximity to a subway station, the surrounding infrastructure and, above all, the security of no longer having to worry about jeonse or monthly rent," she said. "Now that I have a home to live in, I will save money and later decide whether to remain there or sell it."

Interest grows; so do risks

The interest is unlikely to fade. Yoiddang, an AI-powered court auction analysis platform, said users aged 45 to 64 made up 63 percent of its user base over the past three months, and users aged 18 to 34 made up 22 percent. The firm said growth among younger users has been the clearest demographic trend.

"Young users actively bring data generated through AI and similar tools into their decision-making," the company official said.

More properties are expected to reach court auction in the coming months. Experts, including Kim Won-young, a property auction instructor who teaches courses for Seoul district governments and other organizations, say among the properties are apartments bought by the first wave of buyers who borrowed heavily during the administration of former President Moon Jae-in.

Low-rise multifamily homes are also expected to appear in volume, dragged in by jeonse distress that has been pronounced since 2023. Two patterns account for most of it: kkangtong jeonse, in which a property's deposit approaches or exceeds what the home would fetch in a sale, and reverse jeonse, in which prevailing deposits fall below the deposit a landlord still owes an existing tenant.

The surge in supply is a warning as much as an opportunity. Properties come to auction because something has gone wrong with them, and what has gone wrong is not always visible in the listing.

"Auctions are clearly increasing, but the potential for problems is rising just as fast," Sim said. "Buyers who fail to analyze hidden liens, tenancy claims and other legal interests may pay a heavy price, so they should study the process thoroughly before bidding."

For young buyers priced out of Seoul apartments, the auction court is one of the few remaining entry points.

"If the government regulates without addressing the underlying causes of rising home prices, demand will always find a gap," said Yang Ji-young, a real estate expert adviser at Shinhan Securities. "Because auctions are effectively the only way to invest in housing with a small amount of money, young people are flocking to them even though they know the risks are high."

This article from the Hankook Ilbo, the sister publication of The Korea Times, is translated by a generative AI system and edited by The Korea Times.