Seoul Apartment Winning Bid Rate Exceeds 100%... Rebounds After 6 Months

Seoul Apartment Winning Bid Rate 105.1%
Gangnam Area and Reconstruction Apartments Lead Increase
National Apartment Winning Bid Rate Also Rises

Trends in the Number of Apartment Auctions and Winning Bid Rates in Seoul Over the Past Year / Data=ZigZag Auction

[Asia Economy Reporter Hwang Seoyul] The Seoul apartment bid-to-price ratio exceeded 100% in April, rebounding for the first time in six months. This was due to a surge of bidders in the Gangnam area and reconstruction apartments, reflecting expectations of eased real estate regulations under the Yoon Seok-yeol administration.

According to the ‘April 2022 Auction Trend Report’ by Gigi Auction, a court auction specialist company, the bid-to-price ratio for Seoul apartments rose 8.8 percentage points from last month’s 96.3% to 105.1%. The bid-to-price ratio indicates the ratio of the winning bid price to the appraised value, and exceeding 100% means the winning bid price was higher than the appraised value. The average number of bidders also reached 6.7, the highest this year. Meanwhile, the winning bid rate remained unchanged at 55.3% compared to the previous month.

The expectation of eased real estate regulations under the Yoon administration appears to have driven the rise in the average bid-to-price ratio, led by auction properties in the Gangnam area and those with reconstruction issues. The apartment with the highest bid-to-price ratio in Seoul last month was ‘Ssangyong Sweet Dot Home’ in Ogeum-dong, Songpa-gu, Gangnam area, recording a bid-to-price ratio of 141.00%. This auction attracted 11 bidders. In second place was the reconstruction complex ‘Mokdong New Town 11 Complex’ in Sinjeong-dong, Yangcheon-gu, with a bid-to-price ratio of 131.40% and 18 bidders.

The bid rate and bid-to-price ratio for apartments in Gyeonggi Province declined. The bid rate dropped 4.5 percentage points from 59.8% in March to 55.3%, and the bid-to-price ratio decreased by 0.7 percentage points from 101.3% to 100.6%. However, the average number of bidders increased by 4.2 from 8.1 last month to 12.3, due to many bidders flocking to apartments appraised below 300 million KRW located in the outskirts of Gyeonggi Province.

The apartment bid rate in Incheon fell to 42.3% from 48.2% last month, marking a decline for two consecutive months, and the average number of bidders also decreased by 4.0 from 9.4 to 5.4. On the other hand, the bid-to-price ratio rose 6.7 percentage points from 101.7% last month to 108.4%, the highest among the Seoul metropolitan area.

Among the five major metropolitan cities in the provinces, Daegu, which had recorded bid-to-price ratios in the 80% range for three consecutive months this year, re-entered the 90% range at 91.9% after four months. Gwangju (99.0%), Busan (91.6%), and Ulsan (97.5%) also rose by 1.6, 1.3, and 0.7 percentage points respectively compared to the previous month.

Among the eight provinces, Jeju and Jeonnam saw significant increases in bid-to-price ratios. Jeju’s apartment bid-to-price ratio jumped 12.9 percentage points from 88.4% last month to 101.3%, and Jeonnam rose 12.5 percentage points from 81.7% to 94.2%. Chungnam (96.3%), Gyeongbuk (96.3%), and Chungbuk (90.6%) increased by 5.6, 4.2, and 1.8 percentage points respectively.

Meanwhile, the nationwide apartment bid rate rose 0.7 percentage points from 48.5% last month to 49.2%, and the bid-to-price ratio increased 1.5 percentage points from 96.4% to 97.9%. The average number of bidders also rose by 0.7 from 7.3 last month to 8.0.

Lee Joo-hyun, senior researcher at Gigi Auction, forecasted, “With the possibility of loan regulations being eased under the Yoon administration, the bid-to-price ratio is expected to continue rising for the time being.”

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