Seoul Apartments Flooded into Auction Due to High Interest Rates... Highest in 7 Years and 5 Months

Bid rate falls below 30% for the first time in 4 months
"Listings pile up as repeated failures cause backlog"

In October, the number of apartment auctions in Seoul reached its highest level in 7 years and 5 months, but the success rate fell below 30% for the first time in 4 months. The increase in new auction listings is attributed to the burden of loan interest due to high interest rates, while repeated failures to sell have intensified the backlog.

According to the 'October 2023 Auction Trend Report' released on the 7th by Gigi Auction, a company specializing in auction and public sales data, there were 2,629 apartment auctions nationwide last month, the highest in 2 years and 11 months since November 2020 when there were 3,593 cases. Among these, 1,046 were successfully sold, resulting in a success rate of 39.8%, which is 4.9 percentage points higher than the previous month. A Gigi Auction official explained, "The rise in the success rate appears to be due to dozens of corporate-owned apartments in Gangwon and Jeonbuk regions being sold at low prices."

The winning bid ratio, which refers to the ratio of the winning bid price to the appraised value, was 84.1%, up 0.6 percentage points from the previous month, remaining steady. The average number of bidders was 6.3, down 2.0 from the previous month.

By region, Seoul apartment auctions numbered 238, marking the highest in 7 years and 5 months since May 2016 when there were 291 cases. However, the success rate sharply dropped by 5.0 percentage points to 26.5%, falling below 30% for the first time in 4 months since June's 28.3%. The winning bid ratio rose by 1.5 percentage points to 86.7%, and the average number of bidders decreased by 0.7 to 5.8.

Lee Joo-hyun, a specialist at Gigi Auction, said, "The increase in new apartment auctions due to the impact of high interest rates and repeated failures to sell less preferred complexes influenced the rise in the number of cases and the decline in the success rate." He added, "The rise in Seoul apartment winning bid ratios was driven by reconstruction complexes in land transaction permission zones such as Yeouido and Apgujeong."

In Gyeonggi-do, apartment auctions numbered 592, the highest since June 2015 (652 cases), while the success rate fell by 3.9 percentage points to 39.5%. The winning bid ratio rose by 0.4 percentage points to 85.2%, and the average number of bidders decreased by 2.8 to 8.4.

In Incheon, the apartment success rate rose by 4.0 percentage points to 39.1%, and the winning bid ratio increased by 3.7 percentage points to 82.1%, recovering to the 80% range for the first time this year. The average number of bidders was 8.7, similar to 9.1 the previous month.

Among the five major metropolitan cities in the provinces, only Daegu (81.0%→86.1%) saw an increase in apartment winning bid ratios. Among the eight provinces, Gangwon (76.2%→86.4%) showed a rise of more than 10 percentage points, and Chungnam (81.6%) recorded its highest level this year with a 2.1 percentage point increase from the previous month. All other regions showed a downward trend.

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