Seoul Apartment Auctions Heat Up... October Winning Bid Rate Hits All-Time High

Average Winning Bid Rate for Seoul Apartments at 111.8%
Highest Record in Over 13 Years for the Seoul Metropolitan Area as Well

Apartment view in Gangnam area, Seoul [Image source=Yonhap News]

[Asia Economy Reporter Lim On-yu] The average winning bid rate (the ratio of the winning bid to the appraised value) for court auctions of apartments in Seoul in October has been found to have reached an all-time high.

According to Gigi Auction on the 3rd, the average winning bid rate for Seoul apartments in court auctions held last month recorded 111.8%. This is the highest since monthly surveys began. The previous highest monthly average winning bid rate for Seoul apartments was 107.0%, recorded in August. In September, due to the resurgence of the novel coronavirus infection (COVID-19), some auction courts did not operate normally, causing the average winning bid rate to drop to 89.7%, but last month it broke the all-time high again.

Last month, the average winning bid rate for apartments in the entire metropolitan area including Seoul, Gyeonggi, and Incheon (104.3%) was also the highest in 13 years and 11 months since November 2006 (105.0%). While the apartment sales market is shrinking due to various regulations, the auction market is relatively less regulated, and demand to purchase apartments cheaper than market prices has surged, leading to a higher winning bid rate.

A Gigi Auction official explained, "When purchasing a house through court auctions, unlike the sales market, documents such as a financing plan or land transaction permit are not required," adding, "Currently, as prices are rising in the general real estate market, many properties have appraised values lower than market prices, which is also a background factor for the rise in winning bid rates."

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