Gyeonggi Apartment Prices Outpace Seoul for 8th Straight Week... 33 Bid for Auction Property, Driving Winning Price Above Appraisal [Real Estate A to Z]

Strength Spreads Across Southern Gyeonggi Amid Weakness in Gangnam

As apartment prices in Seoul lose momentum amid weakness in the Gangnam area, buying interest is shifting to mid- and lower-priced complexes costing KRW 1.5 billion or less in southern Gyeonggi Province. The upward trend, which began in residential areas serving the semiconductor industry and in non-regulated parts of Gyeonggi Province, has spread beyond the general home sales market to court auctions. While ultra-high-end apartments have lost momentum in both sales and auctions, demand is concentrating on mid- and lower-priced apartments with lower barriers to mortgage borrowing, leading to a series of auction sales at prices above appraised value.

Outpacing Seoul for 8 Straight Weeks... All 10 Areas With the Biggest Gains Nationwide Are in Gyeonggi

A view of an apartment complex in Gyeonggi Province. Yonhap News.

According to the Korea Real Estate Board's weekly apartment price trends released on November 8, apartment prices in Gyeonggi Province rose 0.20% in the first week of November, as of November 2, nearly three times Seoul's overall increase of 0.07%. Gyeonggi has outpaced Seoul for eight consecutive weeks since the second week of September, and all 10 areas with the biggest price gains nationwide this week were in Gyeonggi.

While prices fell across all three Gangnam districts, where high-priced complexes are concentrated, and areas below the midrange in Seoul also showed signs of taking a breather, prices surged in southern Gyeonggi: 0.60% in Giheung-gu, Yongin; 0.57% in Gunpo; 0.55% in Dongan-gu, Anyang; 0.49% in Dongtan-gu, Hwaseong; 0.43% in Yeongtong-gu, Suwon; and 0.33% in Gwangmyeong.

October auction data compiled by GG Auction, a company that tracks court and public auctions, also showed that the sale-to-appraisal ratios in Gwangmyeong (135.3%), Yeongtong-gu, Suwon (106.1%), Manan-gu, Anyang (100.6%), and Gunpo (100.5%) all exceeded 100%. A sale-to-appraisal ratio above 100% means a home was purchased for more than its appraised value.

Strength in Semiconductor Hubs and Non-Regulated Areas... 33 Bidders Crowd Gwanggyo Auction

With the burden of Seoul home prices compounded by lending restrictions, buying interest appears to be shifting to residential areas serving the semiconductor belt and to complexes priced at KRW 1.5 billion or less in southern Gyeonggi, which offer convenient commutes to Seoul. From the start of the year through November 2, cumulative apartment price gains in Gwangmyeong (18.01%), Yeongtong-gu, Suwon (17.97%), Dongan-gu, Anyang (17.55%), Giheung-gu, Yongin (15.61%), and Gunpo (11.11%) were all two to three times the Gyeonggi average of 6.44%.

Gunpo, a non-regulated area, recorded the nation's highest cumulative gain over the past month, at 2.24%. A 59-square-meter unit on the 20th floor at e-Pyeonhansesang Geumjeong Station Eco Central in Sanbon-dong, Gunpo, which traded in the low-to-mid KRW 600 million range early this year, sold for KRW 835 million on November 6, an increase of about KRW 200 million. Buying interest is also spreading to other nearby mid- and lower-priced areas, including Byeongjeom-gu, Hwaseong (0.40%), Wonmi-gu, Bucheon (0.40%), Uiwang (0.40%), and Osan (0.30%).

As sale prices climbed, buyers seeking bargains turned to auctions, but the results were much the same. In October, 33 bidders—the highest number for an apartment auction nationwide, tied for first place—competed for an 84.3-square-meter unit at Gwanggyo Hoban Vertium in Yeongtong-gu, Suwon. It sold for KRW 978,777,700, more than KRW 20 million above its appraised value of KRW 958 million. At an auction for Deokso Jugong Complex 3 in Wabu-eup, Namyangju, 29 bidders competed, and the property found a new owner for KRW 452,551,999, above its appraised value of KRW 431 million.

KRW 1.5 Billion Threshold Determines Loan Limits... Diverging Results for Ultra-High-End and Mid- to Lower-Priced Homes

Market observers say demand for both home sales and auctions is moving in line with the KRW 1.5 billion threshold, above which mortgage loan limits change. The government has capped apartment loans in the Seoul metropolitan area at KRW 600 million. For homes priced above KRW 1.5 billion, the cap falls to KRW 400 million, and for those above KRW 2.5 billion, it drops to KRW 200 million. Loans to cover the balance due after an auction purchase are subject to the same limits in the Seoul metropolitan area and regulated areas, and buyers must move in within six months. This has made it harder to buy high-priced apartments in the Gangnam area with borrowed funds, channeling buyers toward homes priced at KRW 1.5 billion or less, for which they can borrow the full KRW 600 million.

Even within Seoul, sales and auction results diverged around the KRW 1.5 billion mark. In October, ultra-high-end apartments appraised at KRW 2.5 billion or more had a sale-to-appraisal ratio of just 97.1%, while the sale rate was only 13.6%—meaning only about one in 10 units sold. By contrast, apartments appraised at KRW 1.5 billion or less had a sale-to-appraisal ratio of 103.6%. Gwanak-gu (111.7%) and Seongbuk-gu (108.0%), where many mid- and lower-priced complexes are located, recorded the highest ratios in Seoul. The sales market showed a similar pattern: from the beginning of this year through November 2, prices fell in Gangnam-gu and Seocho-gu, where ultra-high-end complexes are concentrated, while Seongbuk-gu rose 16.90%, the largest cumulative gain among Seoul's 25 districts.

An industry official said, "As financing becomes more difficult, eight out of 10 ultra-high-end apartments priced at KRW 2.5 billion or more fail to find buyers and are put up for auction again, even when they go to auction. By contrast, actual homebuyers are flocking to apartments priced at KRW 1.5 billion or less, which qualify for the available loan limits, pushing up winning bids." The number of apartment auctions nationwide reached 3,851 in October, the highest in 12 years and seven months.

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