A survey by the Real Estate Auction Distribution Association has found that the number of homes deisgnated for the auction block by courts throughout Japan has almost doubled in the past year. Housing loan defaults are on the increase, and since it takes up to year from the time a bank begins foreclosure to the time the court allows for bidding on a property, the number of homes on auction will likely continue to increase, perhaps hitting its peak next spring, when loan defaults caused by cancelled or drastically reduced bonuses this past summer will come home to roost, so to speak.
Though the news is hardly surprising, the numbers have come as a shock since the association has never publicized a nationwide survey before. Usually, such information is only released by individual courts.
The association found that 3,773 properties were put up for auction in Mar. 2008. In Mar. 2009, the number exceeded 7,000. This past July 7,229 properties were put on the block, a 70 percent increase over the same month last year.
Broken down into categories, about half are single-family houses, 20 percent are condominiums, and the rest are either vacant lots or business properties. The highest ratio of auctioned properties to all properties is found in rural prefectures. The president of the association told Asahi Shimbun that a good portion of the foreclosures involve “yutori” (relaxed) loans, wherein interest starts out low and increases over time. Many homeowners who took out these loans did not get the raises or promotions they expected. Another reason for the rapid increase in auctions is that real estate companies are hurting and do not have the capital to look for buyers for defaulted homes.