Real Estate Auctions Halted by COVID Resume on 23rd... High-Priced Listings Line Up

Panoramic view of the Resentz apartment complex in Jamsil-dong, Songpa-gu, Seoul.

[Asia Economy Reporter Onyu Lim] Real estate auctions, which were suspended due to the spread of the novel coronavirus infection (COVID-19), will fully resume on the 23rd. Auctions of high-priced properties, including Resentz in Jamsil-dong, Songpa-gu, Seoul, which recently sparked controversy as a "signal of house price decline," are scheduled one after another. With variables such as the COVID-19 shock and interest rate cuts affecting the real estate market, the auction results, considered a barometer of house prices, are drawing attention.

According to the real estate industry on the 18th, the period during which the Court Administration Office recommended courts nationwide to take a recess to prevent the spread of COVID-19 ends on the 20th, and courts at all levels, including the Seoul Central District Court, plan to resume real estate auctions on the 23rd. On that day, bids for major area apartments such as Resentz in Jamsil-dong, Songpa-gu, Dunchon Heights in Dunchon-dong, Gangdong-gu, and Hyundai Parkville in Gwangjang-dong, Gwangjin-gu, will follow one after another.

In particular, Resentz in Jamsil attracts attention as it recently sparked controversy as a signal of house price decline. On the 6th, an 84㎡ unit (exclusive area) in Resentz was traded at 1.6 billion KRW, more than 200 million KRW lower than the average asking price, triggering debates about the peak of house prices in the Gangnam area. This apartment had been traded at 1.85 billion KRW just a month earlier.

Real estate auctions are called a barometer of house price trends. Generally, the higher the real estate market is booming, the higher the winning bid rate?the ratio of the winning bid price to the appraised value?and the greater the number of bidders. This is due to the psychology of expecting house price increases and trying to secure properties early. Subsequently, on the 24th, D-Cube City in Sindorim-dong, Guro-gu; on the 30th, Wirye 2nd I-Park in Jangji-dong, Songpa-gu; and on the 31st, Hyundai Hangang Apartments in Ichon-dong, Yongsan-gu, will be auctioned consecutively. The minimum bid prices for most properties are set lower than the market price. Oh Myung-won, a researcher at Gigi Auction, said, "If a house price decline is expected, the competition rate may decrease, and the winning bid rate may also fall."

Meanwhile, according to Gigi Auction, among the 14,560 auctions scheduled last month, 1,785 cases, accounting for 12.3%, were delayed due to the COVID-19 situation and other factors.

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