"No Land Transaction Permit Needed"... 12,900㎡ Forest Land Near Wangsu, Namyangju, Auctioned with 129 Bidders

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

Photo of the site near Wangsuk, Namyangju, which attracted 129 bidders last month (Photo by Gigi Auction)

[Asia Economy Reporter Ryu Tae-min] #In early last month, 129 bidders flocked to 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 level of competition for forest land, which is relatively difficult to develop compared to other land categories such as residential land. Ultimately, this land, appraised at 476.37 million KRW, was sold for over eight times that amount, at 4.02 billion KRW. The reason this property recorded such a high competition rate and winning bid ratio is that it is located near the Namyangju Wangsuk district, one of the third-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 permits, which is another reason for the high interest.

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 such as the GTX (Great Train Express) Line B and the extension of Seoul Subway Line 9 during the development of the third-phase new town, raising expectations for rising housing prices and surrounding land values.

In particular, this site, which falls under a conservation management area, was designated as a land transaction permission zone on February 13 of 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 a separate land transaction permit, it appears that a significant number of bidders gathered for this auction.

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

Accommodation Facilities Sometimes Sold Below Appraised Value... Auction Fever 'Calms'

In the auction market, there is also investment demand detected for purchasing accommodation facilities, which have been depressed due to COVID-19, at low prices. An example is an accommodation facility (4,048.5㎡) located in Jung-dong, Haeundae-gu, Busan, which was sold at the highest price in last month's auction market. This property was sold for 32.7 billion KRW, which is 82% of the appraised value of 39.83352 billion KRW. Built in March 1995, the hotel is adjacent to the 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 winning bid rate dropped from 41.6% in March to 40.5% in April, and the winning bid ratio fell from 82.6% to 79.0% during the same period.

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