Auction Market Also 'Stalls'... Seoul Apartment Auction Success Rate Falls Below 20%

The apartment bid success rate in Seoul fell below 20% for the first time in four months. This is interpreted as a continued wait-and-see stance due to DSR (Debt Service Ratio) regulations and the burden of high-interest rates.

[Image source=Yonhap News]

According to the 'April 2023 Auction Trend Report' released on the 10th by Gigi Auction, a court auction specialist company, the bid success rate for Seoul apartments recorded 19.0%, down 14.1 percentage points from the previous month (33.1%). It fell below 20% again after four months, and the bid price ratio dropped 2.5 percentage points from the previous month (79.0%) to 76.5%.

This appears to be because most Seoul apartments are high-priced apartments excluded from the special Bogeumjari Loan program, and the wait-and-see stance is maintained due to DSR regulations and the burden of high-interest rates. On the other hand, the average number of bidders increased by 2.5 from the previous month (5.4) to 7.9. It is analyzed that the competition rate for apartments in the Gangnam area increased as loan regulations for ultra-high-priced apartments in regulated areas were eased, raising the average number of bidders.

[Image source=Gigi Auction]

The bid success rate for apartments in Gyeonggi-do rose 10.9 percentage points from the previous month (30.3%) to 41.2%, and the bid price ratio recorded a similar figure of 74.1% compared to the previous month (74.2%). The average number of bidders was 9.9, down 4.6 from the previous month (14.5). The bid success rate for apartments in Incheon fell 7.2 percentage points from the previous month (27.6%) to 20.4%. The bid price ratio rose 2.0 percentage points from the previous month (68.2%) to 70.2%, with low-priced apartments under 300 million KRW appraisal value showing strength. The average number of bidders decreased by 1.5 from the previous month (9.8) to 8.3.

The number of apartment auctions nationwide was 2,146, of which 853 were successful bids. The bid success rate rose 10.5 percentage points from the previous month (29.2%) to 39.7%. The bid price ratio remained at a similar level of 75.0% compared to the previous month (75.1%), and the average number of bidders increased by 0.4 from the previous month (7.5) to 7.9. A Gigi Auction official explained, “As the government has implemented comprehensive real estate regulation easing, low-priced buying demand has flowed in, leading to a downward stabilization trend in the nationwide apartment bid price ratio.”

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