Despite Weak Investor Sentiment, Buyers Are Active... Seoul Apartment Auctions Under 1.5 Billion Won Heat Up

Average Number of Bidders in Seoul Hits Yearly Low
Impact from Price Adjustments in Gangnam 3 Districts and Property Tax Pressure
Successful Bids Concentrated on Apartments Under 1.5 Billion Won
Auction Market Also Sees 'Price Alignment' Tr

#On March 10, 13 bidders competed in the auction for an 84.8㎡ unit in the Jugong 1st Apartment Complex, located in the Huigyeong-dong area of Dongdaemun District, at the court. The property had previously failed to attract a buyer in January, causing the starting price to drop to 80% of its appraised value (655.2 million won). However, with a large influx of bidders in this auction, the winning bid was 883.9 million won—about 64.9 million won higher than the original appraised value of 819 million won. The winning bid ratio (ratio of winning bid to appraised value) stood at 108%.

#On February 25, a 51㎡ unit in the Mullae Hyundai 6th Apartment Complex, located in Yeongdeungpo District, found a new owner at 803.53 million won. This was 93.53 million won higher than the initial appraised value of 710 million won, resulting in a winning bid ratio of 113%. This price also exceeded the most recent actual transaction price (720 million won on January 10).

Due to the government’s strengthened regulations on multiple homeowners, investor sentiment has weakened, causing the number of bidders for Seoul apartment auctions to fall to its lowest level so far this year. This trend is attributed to the possibility of real estate tax reforms and the impact of stricter loan regulations, which have reduced speculative demand for high-priced housing. In contrast, for mid- to low-priced apartments under 1.5 billion won, there has been a steady stream of winning bids as genuine homebuyers rush in to secure properties.

Apartment complex view in Nowon District. Photo by Yonhap News Agency

According to GG Auction, a specialist auction data company, the average number of bidders for Seoul apartments in the fourth week of March was 4.1, down by 3 from the previous month’s figure of 7. Typically, a decrease in the number of bidders in the auction market indicates a weakening of investor sentiment.

On the other hand, the winning bid ratio (the ratio of winning bid to appraised value) was 100.3%, up by 0.6 percentage points from the previous week (99.7%). The winning bid ratio has continued to fluctuate slightly above and below the 100% mark, maintaining a trend of being supported in the high 90% range.

Despite the decrease in bidders, the reason the winning bid ratio remains above 100% is that high winning bids have continued to occur, particularly for mid- to low-priced apartment complexes under 1.5 billion won. Indeed, of the 49 Seoul apartment auction properties awarded at court so far this month, 40 were for apartments under 1.5 billion won. Of these, 13 recorded winning bid ratios above 100%, driving up the overall ratio.

Looking at individual cases, an 85㎡ unit in the Gireum New Town area of Seongbuk District, auctioned on March 10, was awarded at 1.0766 billion won—105.6 million won higher than the initial appraised value—resulting in a winning bid ratio of 111%. An 85㎡ unit in the Dapsimni Doosan complex in Dongdaemun District was awarded at a winning bid ratio of 109% (943.67 million won).

Experts analyze that due to the burden of property holding tax and an increase in listings from multiple homeowners, high-priced apartments have entered an adjustment phase, leading the auction market to shift toward genuine homebuyer demand.

Joo-hyun Lee, Senior Researcher at GG Auction, said, "Speculative demand had previously concentrated in the auction market because properties were not subject to occupancy requirements under the land transaction permit system, but it appears some of this demand has shifted away due to price corrections in the Gangnam 3 Districts and pressure from property holding taxes." He added, "Meanwhile, a large number of genuine homebuyers are targeting apartments under 1.5 billion won, where the tax burden is relatively lower."

Experts predict that, for the time being, the trend of “price alignment” for apartments under 1.5 billion won will continue in the auction market as well. Senior Researcher Joo-hyun Lee said, "If the asking prices for apartments under 1.5 billion won adjust in the sales market, the same trend will be reflected in the auction market. In particular, mid- to low-priced complexes in outlying areas such as Nowon District, where there are reconstruction development opportunities and high demand for good school districts, could show strong performance."

This content was produced with the assistance of AI translation services.