Auctions of foreclosed homes in Tokyo soar

People struggling to repay mortgages; more buyers as prices are falling

Auctions of foreclosed homes in Tokyo rose to a five-year high as more people struggle to repay their mortgages, Sanyu Appraisal Corp said.

The number of homes sold at auctions supervised by the Tokyo District Court increased 22 per cent to 2,795 in the six months ended Sept 30, from the preceding six months ended March 31, the Tokyo-based property appraiser said.

‘More people are submitting bids to buy foreclosed properties because the prices are falling,’ Hirohisa Hagino, managing director of Sanyu, said by telephone yesterday.

The number of bidders more than doubled to 18,171 in the same period. ‘This is the highest since we began compiling data in 2003,’ Mr Hagino said.

Of the 2,795 properties auctioned, 87.6 per cent were bought, an increase of 12 percentage points from the six months ended March 31.

‘Buyers are showing strong appetite for condominiums on expectations the market will recover,’ Mr Hagino said. He said 93 per cent of condominiums offered at auction were sold in the six months ended Sept 30.

Source: Business Times, 17 Dec 2009