Revival of Mid-Low Priced Apartment Auctions in the Seoul Metropolitan Area Driven by 'Naejipmaryeon' Demand

Incheon Apartment Winning Bid Rate 78.3%... 8 Out of 10 Units Sold
40 Bidders for 36-Year-Old Complex... Sold at 1.8 Times Appraised Value
High Competition as Demand for Homes Under 600 Million Won with Easy Loans Surges

Apartment buildings in the Seoul area (Photo by Yonhap News)

[Asia Economy Reporter Ryu Tae-min] At the real estate auction held at Incheon District Court on the 10th of last month, the hottest item was a 39㎡ (exclusive area) A apartment unit on the first floor located in Mansu-dong, Namdong-gu, Incheon. This complex, built 36 years ago, attracted 40 bidders and was sold for 241.99 million KRW, which is 80% higher than the appraised value of 135 million KRW. The second highest bid for this property also exceeded 225 million KRW, indicating fierce competition.

The real estate auction market, which had recently slowed down, is showing signs of revival, especially in the outskirts of Incheon and Gyeonggi Province. As demand for ‘owning a home’ concentrates on relatively affordable mid-to-low price complexes with easier loan access, competition has intensified, leading to a strong rebound in all three major auction indicators: success rate, sale price ratio, and number of bidders.

According to Gigi Auction, a specialized court auction company, the average success rate for apartment auctions in Incheon last month was 78.3%, up 21.9 percentage points from 56.4% the previous month. The success rate indicates the ratio of sold items to auctioned items, meaning 8 out of 10 auctioned properties were sold.

The number of bidders also surged. The average number of bidders for apartment auctions in Incheon last month was 9.8, nearly double the 5.6 bidders in the previous month. The average number of bidders had risen to 10.1 in September last year but then gradually declined to 4.7 in December. Gigi Auction explained that the recent influx of demand for mid-to-low price complexes under 600 million KRW has caused a rebound.

As competition intensified, the sale price ratio also rose. Last month, the sale price ratio for apartment auctions in Incheon was 113.2%, up 4 percentage points from 109.2% the previous month. The sale price ratio is the ratio of the final sale price to the appraised value. For example, an apartment appraised at 100 million KRW was sold for 113.2 million KRW.

Intensified Competition in Mid-to-Low Price Complexes Under 600 Million KRW... Sale Prices Exceed Appraised Values by Over 100 Million KRW

Looking at actual auction cases, an apartment of 109㎡ in Nonhyeon-dong, Namdong-gu, Incheon was sold for 400 million KRW on the 10th of last month. This amount is 137 million KRW higher than the appraised value of 263 million KRW. A 59㎡ apartment in Dongchun-dong, Yeonsu-gu, Incheon also attracted 19 bidders and was sold for 350 million KRW, 100 million KRW above the appraised value of 250 million KRW.

The Gyeonggi area showed similar trends with many auction properties attracting numerous bidders. A 76㎡ older complex in Eunhaeng-dong, Jungwon-gu, Seongnam-si attracted 16 bidders and was sold for 777.89 million KRW, double the appraised value of 400 million KRW. An 85㎡ apartment in Geumgok-ri, Jinjeop-eup, Namyangju saw 27 bidders and was sold for 442.01 million KRW, 178 million KRW higher than the appraised value of 264 million KRW.

Senior researcher Lee Joo-hyun of Gigi Auction said, “Recently, buying demand for mid-to-low price complexes under 600 million KRW in the metropolitan area, where loans are relatively easy to obtain, has strengthened. It appears that buyers are flocking to auctions, which are relatively cheaper than the sales market, to secure their own homes.”

Meanwhile, in the Seoul apartment auction market, the sale price ratio recorded 97.3%, marking a decline for four consecutive months. Researcher Lee Joo-hyun explained, “Last month, there were many ultra-high-priced apartments over 5 billion KRW and share auctions, which resulted in a relatively low sale price ratio.”

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