The Counterattack of the 'Land Transaction Permission System'... 129 Bidders Flock to Auction of 10,000㎡ Forest Land Near Wangsu, Namyangju

No Land Transaction Permit Needed for Auction
Over 8 Times Appraised Price Paid for 10,000㎥ Forest Near Wangsu, Namyangju
Impact of New Town Development Expectations

[Asia Economy Reporter Ryu Tae-min] #In early last month, 129 bidders gathered for a 10,353㎡ forest land in Yongjeong-ri, Jingun-eup, Namyangju-si, Gyeonggi Province, which was put up for court auction. This is an unusual competition for forest land, which is relatively difficult to develop compared to other land categories such as residential land. Eventually, this land, appraised at 476.37 million KRW, was sold for over eight times the price at 4.02 billion KRW. The reason this property recorded such a high competition rate and bid-to-appraisal ratio is because it is located near the Namyangju Wangsuk District, one of the 3rd phase new towns in the Seoul metropolitan area. Although the area was designated as a land transaction permission zone along with the new town site, court auctions do not require transaction permission, which is another reason.

According to Gigi Auction, a court auction specialist company, on the 11th, the popularity of the auction market is actually increasing due to the government's strong real estate regulations.

In fact, the forest land in Yongjeong-ri, which was sold at a high price, is located only 1.8 km away from Namyangju Wangsuk 1 District. Wangsuk 1 District is expected to see expanded metropolitan transportation networks, including the GTX (Great Train Express) Line B and the extension of Seoul Subway Line 9, as part of the 3rd phase new town development, raising expectations for rising housing prices and surrounding land values.

In particular, this site, which falls under the conservation management area, was designated as a land transaction permission zone on February 13 this year, covering the Jingun-eup area, making it impossible to purchase land above a certain size without permission. However, since land acquired through auction does not require separate land transaction permission, a significant number of bidders seem to have gathered for this auction.

Jang Geun-seok, a team leader at Gigi Auction, explained, "The surrounding lands in the area are traded at prices exceeding 2 million KRW per pyeong, showing high development expectations. Compared to that, the auction appraisal price is low, and since it is free from land transaction permission, it seems to have gained popularity."

Accommodation Facilities Sold Below Appraisal Price... Auction Fever 'Calms Down'

In the auction market, investment demand to purchase accommodation facilities, which were depressed due to COVID-19, at low prices is also being detected. The accommodation facility located in Jung-dong, Haeundae-gu, Busan, which was sold at the highest price in last month's auction market, is an example. This property was sold for 32.7 billion KRW, which is 82% of the appraisal price of 39.83352 billion KRW. Built in March 1995, the hotel is adjacent to Haeundae Beach. In addition to the hotel, more than 20 real estate properties, including various lands and buildings attached to the hotel, were sold as a package.

However, the auction fever that surged significantly in March has somewhat calmed down. The number of nationwide auctions conducted in April was 10,551, down 1,294 cases (10.9%) compared to March. The number of successful bids also decreased by about 700 cases to 4,268. The bid success rate dropped from 41.6% in March to 40.5% in April, and the bid-to-appraisal ratio fell from 82.6% to 79.0% during the same period.

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