Recently, information about the "legal auction house" has been very popular.
According to the statistics of Ali auction platform, in recent years, the number of legal auction houses has increased year by year, from 9,000 units in 2017 to more than 1.6 million units in 2021.
As soon as the data came out, combined with the news of the mortgage supply cut by some netizens, it triggered reverie and worry.
Is the above data really reliable?
Why is the legal auction house on fire?
Is it good to pick up leaks in the legal auction room?
Take a look today.
Is the data of the surge in legal auction houses reliable?
From 9,000 units in 2017 to 1.68 million units in 2021, the number of legal auction houses has increased by 186 times in just five years.
Is this data reliable?
According to industry insiders, although there are also auctions caused by mortgage loans, this situation is not common, and most of the legal auction houses are caused by debt disputes, joint and several guarantees, company bankruptcy and other issues.
The real change in the number of legal auction houses may not be as sensational as the data.
The number of legal auction houses on a certain platform is not equal to the total number of legal auction houses in the country.
In 2017, the number of legal auction houses on the Ali platform was only 9,000 sets, or because the auction business volume of the platform was not high at that time.
In the following 5 years, the business boomed, and more and more legal auction houses flowed to the platform, thus creating the illusion of "the number of legal auction houses in the country has surged".
The number of listings is not equal to the number of auctions of listed legal auction houses.
If you enter the auction link, there will be three auction opportunities. After the first auction, the "streamed auction" of the property will enter the "second auction" and "three auctions" again, and the number of three auctions will be counted into the total number of auctions.
For example, in a city at the beginning of 2021, there were 300 sets of legal auction houses, all of which were auctioned three times, that is, 900 auctions.
According to the algorithm on the Ali auction platform, the calculation at the end of the year will show that there are 900 houses participating in the auction, up 300% in one year.
Therefore, the 1.68 million sets of legal auction houses in 2021 are actually 1.68 million auctions.
According to the data of Zhejiang Asset Research Institute, in 2021, among the judicial auction real estate in the country, a total of 323,100 auctions of real estate were auctioned, far lower than the 1.68 million times displayed on the auction platform.
Why is the legal auction house on fire?
A legal auction house is a house that is forced to be auctioned by a court. When the debtor (owner) is unable to perform the loan contract or cannot pay off the debt, the creditor can apply to the court for compulsory enforcement through judicial procedures, auction the house under the debtor's name, and use the auction proceeds to repay the claim.
There are many sources of legal auction houses, and there are 5 common types of disputes involving legal auctions:
Business loans
Private Lending
Financial crime
Judicial forfeiture
Unowned property
Due to the special listing, the legal auction house was once considered to be synonymous with "picking up leaks".
1, the price is cheap
We generally buy a house at a transaction price called the market price, and when the bank lends to the buyer, it will give an appraisal price that is slightly lower than the market price.
The legal auction house needs to be bid, including the starting price and the transaction price.
The starting price is generally 20% off the appraisal price. If the first auction fails, the starting price can be discounted by 20% in the second auction; if the auction is streamed again, it can be 20% off, and a set of legal auction houses can be auctioned up to 3 times.
After the discount is added, the theoretical starting price of a set of legal auction houses can be discounted by as low as 50%, and according to the past auction information, the transaction price is much lower than the market price.
Take an auction on December 25, 2021 as an example:
Located in Nanshan District, the 114-square-meter legal auction house has an appraisal price of 3.84 million (lower than the market price), and the starting price is less than 27,000 / ㎡, and finally sold for 3.62 million (lower than the appraisal price), if taxes are not included, the unit price is about 31,000 / ㎡.
At the time of the auction, the average price of the neighborhood near the property was 60,000/㎡. That is to say, this set of legal auction houses is almost half price transactions.
2. Unlimited purchase
With the inclusion of "housing and not speculation" into the "14th Five-Year Plan", more and more cities have begun to restrict purchases.
At the beginning, the legal auction houses in many cities were not included in the purchase restriction policy, which made people who had the demand for house purchases but did not have the qualifications to buy houses see hope, and the legal auction house market was once hot.
In February 2021, of the 77 sets of legal auction houses in Hangzhou, 18 sets were sold at a price lower than the appraisal price, and the remaining 50 sets were sold at a price higher than the appraisal price after multiple rounds of auction.
However, after March 2021, Hangzhou introduced a new policy to include legal auction houses in the scope of the new policy, and the number of legal auction houses sold above the appraisal price fell sharply.
It can be seen that the popularity of the legal auction house is directly related to the purchase restriction policy.
Can the legal auction room really pick up leaks?
Although the number of legal auction houses has increased, the transaction volume has not risen with it.
According to data, the transaction rate of residential auction houses in Guangdong Province in 2021 dropped from 42.2% to 38.2%, while an average of 5 people signed up for each completed house (6 in the same period of 2020).
Guangzhou's residential auction house transactions have also declined, with the total number of units sold decreasing by 26 units, and the transaction rate is only 33.7%, down 2.3%.
The 33.7% turnover rate means that nearly 70% of the legal auction houses are not wanted.
From being suitable for "picking up leaks" to "not being able to sell", what has happened to the legal auction house?
On the one hand, the space for leaks in the legal auction room is getting smaller and smaller
In 2021, the transaction price/appraisal price of the Guangdong Provincial Residential Law Auction Discount Rate is 100.2%, and the transaction price is higher than the appraisal price.
As we said earlier, the popularity of legal auction houses is mainly due to low prices, good luck and even 50% off, but buyers actually have to bear risks such as unclear property rights, property occupation, hidden costs, and debt collection.
On January 21 this year, a 240-square-meter mansion in Shenzhen's Antuo Mountain was auctioned, with a starting price of 31.64 million yuan and a transaction price of 43.94 million, with a premium rate of 38.8%.
However, the price of the real estate at that time was generally between 210,000 / ㎡ - 230,000 / ㎡, so the law auction house was sold at a unit price of 183,000 yuan, and it seems that it also earned.
However, if you count the 5 million taxes and other hidden costs, the unit price has risen to 200,000 +/㎡. The so-called hidden cost is actually that the original owner signed a 5-year lease, and the lease term is more than 3 years.
The sale and purchase of the lease is not broken, that is, without seeking other solutions, the bidder must wait until 3 years before moving in.
Counting down, this set of legal auction houses seems to have "no leakage to pick up".
On the other hand, the payment cycle of the legal auction house is short
The court auctions the property in order to allow the creditor to obtain funds to repay the debt, so as to settle the creditor-debtor relationship between the creditor and the debtor, so the payment cycle is very short.
Therefore, many legal auction houses require full payment within 10 working days. But for ordinary wage earners, it is not easy to suddenly come up with a large amount of money.
There are also some legal auction houses can be normal commercial mortgages, but the payment cycle is very short, need to be released within 7 days, once the time limit is exceeded, the court has the right to directly recover the house to re-auction, the bidder's deposit will also be confiscated, making many people prohibitive.
【Reference Articles】
The french auction house auctioned 200,000 +/ flat, why is the Anto Mountain mansion so hot? Housing Bureau.20220121
A rumor that seems to be quite true: the surge in legal auction houses, the tide of supply cuts is coming. Wu Xiaobo Channel .20220408
The number of french auction houses has surged to 1.6 million units! Is the tide of supply cuts coming? Leju Network.20220419