When 10 People Gather at Seocho Apartment, Price Jumps 2 Billion Won... Eyes Turn to Auctions

First Central District Court Auction of the Year Held Yesterday... Seocho Property Sold
Sold for Over 200 Million Won Above Appraised Value... Reflecting Price Increase Expectations
Experts Say "Auction Market Will Outperform Sales Market This Year"
No Proof of Funds Required... Auction Advantageous if Prices Are Similar

Seoul Apartment Complex (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] On the morning of the 7th, at the Seoul Central District Court Auction Division 3, the first auction of the year handling properties in the Gangnam area saw the Seocho 4th Hyundai Apartment in Seocho-gu, measuring 52㎡ (exclusive area), sold for 968.88 million KRW. This amount is more than 250 million KRW higher than the appraised value of 713 million KRW. There were 10 bidders. Despite the real estate market freezing due to the December 16 real estate measures, the real estate auction market remains hot in the new year.

According to related industries on the 8th, besides the Seocho 4th Hyundai Apartment auctioned the previous day, most apartments in the Gangnam area have auction sale prices exceeding 100% of the appraised value since the government's December 16 measures. The 85㎡ Myungin Gallery in Yeoksam-dong, Gangnam-gu, was sold for 806.99 million KRW, and the 182㎡ Kyungnam Apartment in Gaepo-dong, Gangnam-gu, was sold for 2.375 billion KRW, recording auction sale price rates of 106% and 101%, respectively. The 166㎡ Sampung Apartment in Seocho-dong, Seocho-gu, also found a new owner at 2.61626 billion KRW, 3% higher than the appraised value.

This trend is analyzed as reflecting expectations that prices of well-located Gangnam area apartments will continue to rise despite government measures. Researcher Oh Myungwon of Gigi Auction explained, "In the case of Seocho 4th Hyundai, it is in the central part of Gangnam and is a small apartment, so bidders seemed to have gathered judging its high liquidity."

Experts expect that investors and buyers looking for properties for actual residence may flock even more to the auction market this year to find cheap and good properties.

There is also a forecast that the government's strong regulatory measures may actually be a boon for the auction market. According to the Ministry of Land, Infrastructure and Transport, starting as early as March, when purchasing houses over 900 million KRW in Seoul (speculative overheated districts), buyers must submit a funding plan and detailed supporting documents, but this does not apply to auctions. Even if not buying cheaply, auctions may be more advantageous at similar prices.

It is also analyzed that many investors in high-priced auction properties are wealthy individuals who do not rely on loans, so the impact of government regulations will be minimal. Researcher Oh said, "It is very rare to apply for loans on properties over 1 billion KRW in auctions," and "Apartments over 1.5 billion KRW are sometimes sold at the first auction without failing."

Professor Kwon Daejung of Myongji University’s Department of Real Estate said, "As the phenomenon of property withdrawal intensifies in the general transaction market and prices of houses under 900 million KRW are rising, the advantage of auctions, where prices can be lower than market value after just one failed auction, will become greater."

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