As Housing Prices Soar, Heated Auctions... Highest Winning Bid Rate for Apartments in the Seoul Metropolitan Area

A 10%P Jump in Four Months to 107.5%
Number of Bidders per Case Also Increased from 6.0 to 9.7

[Asia Economy Reporter Ryu Tae-min] Last month, the bid-to-appraisal ratio for apartments in the Seoul metropolitan area reached an all-time high in court auctions. This appears to be because buyers turned their attention to the auction market due to rising house prices and the shortage of jeonse (long-term lease) options.

According to Gigi Auction, a court auction specialist company, the bid-to-appraisal ratio for apartments in the Seoul metropolitan area in January was 107.5%. This means that a property appraised at 100 million KRW was sold for 107.5 million KRW. Gigi Auction explained that this is the highest figure since related statistics began being compiled in January 2017. The bid-to-appraisal ratio for apartments in the metropolitan area has been above 100% for four consecutive months since October last year (104.4%), showing a continuous upward trend. The total appraisal value of metropolitan area apartments in January was 82.5914 billion KRW, and the total bid price recorded was approximately 88.8924 billion KRW.

The bid success rate, which is the ratio of successful bids to the number of auctions held, also soared. It remained in the 50% range until November last year but rose to 67.6% in December and reached 74.3% in January this year. The average number of bidders per property, which was 6.0 in September last year, increased to 6.2 in October, 6.8 in November, and 7.1 in December, then surged to 9.7 in January this year.

Despite a significant decrease in the number of court auctions held since the end of December last year due to the spread of COVID-19, demand from buyers appears to have grown stronger. In fact, the number of court auctions for metropolitan area apartments was 179 in December last year and 296 last month, both falling below the monthly average of 533 for the previous year for two consecutive months.

Oh Myung-won, a senior researcher at Gigi Auction, explained, “The continuous increase in the average number of bidders and the minimal difference between bid prices and market prices indicate that real demand is entering the auction market. With house prices rising sharply and a severe shortage of listings, interest in auctions is also growing.”

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