Seoul Apartment Winning Bid Rate Declines for 5 Consecutive Months... Impact of Interest Rate Hikes and Loan Regulations

Seoul Apartment Winning Bid Rate Continues to Decline Since October Last Year
Jiji Auction: "Will Persist for a While Due to Interest Rate Hikes and Loan Regulations"
Winning Bid Rates Fall in Incheon and Gyeonggi-do

Graph of the number of apartment auctions and winning bid rate trends in Seoul over the past year / Data by Gigi Auction

[Asia Economy Reporter Hwang Seoyul] Due to interest rate hikes and loan regulations, the bid-to-appraisal ratio for apartments in Seoul has been declining for five consecutive months.

According to the 'March 2022 Auction Trend Report' released on the 11th by Gigi Auction, a court auction specialist company, the bid-to-appraisal ratio for Seoul apartments was 96.3%, down 1.0 percentage point from the previous month. Since reaching an all-time high last October, it has been declining for five consecutive months (119.9%→107.9%→103.3%→103.1%→97.3%→96.3%). The bid-to-appraisal ratio is the ratio of the winning bid price to the appraised value, and exceeding 100% means the winning bid price is higher than the appraised value. Gigi Auction analyzed that the downward trend in the bid-to-appraisal ratio will continue for the time being due to interest rate hikes and loan regulations.

Although the bid-to-appraisal ratio has fallen, the winning bid rate is rising again as the number of bidders increases, especially for apartments that failed to sell at least once. The winning bid rate for Seoul apartments (55.3%) rose 5.3 percentage points from last month (50.05%). The winning bid rate is the ratio of properties with a decided winning bidder among those up for auction. The average number of bidders was 5.0, slightly down from 5.4 last month.

The auction indicators for apartments in Gyeonggi-do showed a similar trend to Seoul. The bid-to-appraisal ratio was 101.3%, down 2.5 percentage points from last month (103.8%), but the winning bid rate rose 3.5 percentage points to 59.8% from last month (56.3%). The average number of bidders was 8.1, down 0.7 from 8.8 last month.

The bid-to-appraisal ratio and winning bid rate for apartments in Incheon dropped sharply. The bid-to-appraisal ratio recorded 101.7%, down 11.5 percentage points from last month (113.2%). The winning bid rate was 48.2%, falling 30.1 percentage points from last month (78.3%), marking the 40% range for the first time in 1 year and 5 months.

Among the five major metropolitan cities outside the capital area, except for Ulsan (96.8%), the bid-to-appraisal ratios for apartments in all other regions declined. The region with the largest drop was Busan (90.3%), down 6.2 percentage points from last month (96.5%). Daegu (85.2%) followed with a 3.7 percentage point drop, maintaining the 80% range for three consecutive months, while Daejeon (93.4%) and Gwangju (97.4%) fell by 0.6 and 0.4 percentage points, respectively.

Nationwide, there were 1,415 apartment auctions, of which 686 were sold, resulting in a winning bid rate of 48.5%. The bid-to-appraisal ratio was 96.4%, and the average number of bidders increased by 1.0 from last month to 7.3.

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