End of suspension period for public auction… Increase in home purchases expected, ‘[Edaily Reporter Park Ji-ae] Korea Land & Housing Corporation (LH) has increased the number of homes purchased through the use of preemptive purchase rights to 5 units to prevent damages from speculative pre-sale transactions. With the increase in homes affected by the end of the suspension period for public auctions, it is expected that LH’s purchases will gradually increase.’,
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, ‘According to the Ministry of Land, Infrastructure and Transport and LH on the 23rd, LH utilized preemptive purchase rights handed over to victims of speculative pre-sale transactions in last month’s auction to win the bid for 1 unit of an officetel and 1 unit of urban housing in Busan.’,
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, ‘On the 14th, they were also successful in bidding for 1 unit of urban housing in Hwaseong, Gyeonggi Province, and on the 19th, 1 unit of an officetel in Incheon.’,
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, ‘As a result, the number of homes purchased by LH starting with a house in Incheon’s Michuhol-gu in January this year has reached a total of 5 units. It has only been about a year since the special law was enforced.’,
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, ‘LH will convert the acquired homes into public rental housing to lease to the victims, ensuring that they do not have to vacate the homes where they used to live.’,
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, ‘Amidst the aftermath of speculative pre-sale transactions and reverse lease transactions, the number of villa properties in the auction market has been increasing, and the recent bid rate (the proportion of properties won out of total properties) has increased due to public participation in the auction.’,
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, ‘According to data from the auction company Gigi Auction, the number of villa auctions in Seoul in the last month was the highest in 18 years and 4 months since January 2006, reaching a total of 1485 properties.’,
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, ‘While the bid rate for villas remained in the 10% range until April this year, it has risen to the 20% range as the number of bids from the Korea Housing Finance Corporation (HUG) increased.’,
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, ‘The HUG, which operates a security deposit return guarantee for pre-lease deposits, has been able to recoup the money invested through auctions over 2-3 years after returning the deposit to the tenants in place of the landlord.’,
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, ‘Until recently, the HUG would apply for a forced auction of properties with security deposit issues, only receiving a priority repayment amount without participating in the bid. However, with the introduction of the ‘steadfast security deposit housing’ where the HUG acquires the financially troubled properties through auctions and leases them to non-homeowners at around 90% of the market price, they have started actively participating in auctions.’,
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, ‘The bid rate for villas in Seoul was 9.8% in February, 13.6% in March, and 15.0% in April this year, but it surged to 27.8% in May with the HUG’s involvement.’,
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, ‘If LH also participates in the auction of properties affected by speculative pre-sale transactions, the bid rate for villas could further increase. The issue is that even with the auction bid, it may take about 2-3 years to complete.’,
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, ‘Lee Kang-hoon, head of the Housing Renters’ Legal Support Center “Tenant 114,” who is a lawyer, stated at a special forum evaluating the implementation of the Speculative Pre-sale Law held last week at the National Assembly, “The realization of auctions of the accumulated homes affected by speculative pre-sale transactions is progressing slowly and may take several years,” and “the government needs to inform the victims that it will take considerable time to realize public auctions and take additional measures to protect housing rights.”‘,
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, ‘The government plans to strengthen LH staff and allocate additional budget for the purchase of affected homes.’,
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, ‘However, it is a concern that with an estimated increase of up to 36,000 speculative pre-sale victims by May next year, one LH employee would have to handle the purchase of hundreds of homes.’,
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, ‘An official from the Ministry of Land stated, “In the past, when preemptive purchase rights were operated for bankrupt rental housing, a separate ‘auction team’ was sometimes selected,” and “we will sufficiently strengthen LH staff to ensure there are no problems.”‘,
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, ‘In 2007, the government enacted a special law for the protection of tenants of bankrupt public rental homes, under which public rental apartments put up for auction were purchased by the government to be converted into national rental apartments and the security deposits were returned to the tenants. This was a measure taken in response to the collapse of private construction companies that built rental apartments in the mid-2000s.’,
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