Apartments Under 1.5 Billion Won Sold Above Appraised Value... Seoul Auction Market Sees Strength in Mid-to-Low Priced Units [Real Estate A to Z]

Seoul's Successful Bid Rate Remains Above 100% for Two Consecutive Months
Strong Bid Rate Despite Fewer Bidders
Mid- to Low-Priced Complexes Under 1.5 Billion Won Attract End-User Demand

#On the 11th of last month, a 49.5㎡ apartment in Gayang 9th Complex, Gangseo-gu, Seoul, which was put up for auction at the Seoul Eastern District Court, was successfully bid for 950.09 million won. This price is nearly 200 million won higher than the initial appraised value (750 million won), resulting in a successful bid rate of 126.68%. There were 20 bidders for this property.

Last month, the successful bid rate for Seoul apartments rose slightly, remaining above 100% for the second consecutive month. Analysts say that the influx of end-user demand for mid- to low-priced apartments under 1.5 billion won in the recent auction market has driven up the successful bid rate.

According to GGI Auction on June 6, the successful bid rate for Seoul apartments last month was 100.8%, up by 0.3 percentage points from the previous month (100.50%).

The successful bid rate for Seoul apartments fell below 100% in March for the first time in six months, as the auction market cooled due to the burden of property holding taxes and regulations on multiple homeowners. However, it rebounded in April and has remained above 100% for two consecutive months. A successful bid rate above 100% means that the winning bid price is higher than the appraised value.

In contrast, the average number of bidders dropped sharply to 5.86 from 7.53 in the previous month. It is the first time since March 2023 that the number of bidders has fallen below 5.5. This decline indicates that investor enthusiasm in the auction market has waned compared to before.

Despite the decrease in the number of bidders, the successful bid rate exceeded 100% because demand from end-users was concentrated on mid- to low-priced apartment listings. Just like in the sales market, the auction market is also shifting toward end-users, with substantial demand for apartments under 1.5 billion won for actual residence.

In fact, looking at the top 10 properties with the highest successful bid rates last month, except for one, all were in complexes priced below 1.5 billion won. A 23㎡ unit at Seonggyeong Apartment in Ichon-dong, Yongsan-gu, was sold for 1.06 billion won, 500 million won above the initial appraised value (560 million won), achieving a successful bid rate of 189.9%. There were as many as 30 bidders for this property. Additionally, a 66.8㎡ unit at Forena Songpa in Songpa-gu was awarded to a new owner for 1.65 billion won—higher than the initial appraised value (1.217 billion won)—with 19 bidders participating in the first auction. The successful bid rate was 135.58%.

Experts believe this trend of end-users flocking to mid- to low-priced complexes and driving up successful bid rates is likely to continue for the time being. Ji Juhyun, senior advisor at GGI Auction, explained, "Due to the recent surge in monthly and annual rental prices and rising prices of high-end apartments above 2 billion won, the auction market is also being reshaped with a focus on end-users rather than investors. While overall investment enthusiasm in auctions has waned, we are seeing a concentration of bidders for apartments under 1.5 billion won, which is pushing up the successful bid rates."

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