Real Estate Market Frozen... Seoul and Gangnam Apartment Auctions Come to a Halt

Real Estate Market Barometer Winning Bid Rate Falls for Two Consecutive Months
Prices Written Low Amid Market Adjustment Concerns
Transactions Mainly Focused on Low-Priced Listings

View of apartments in Ichon-dong, eastern Seoul, as seen from the 63 Building observatory. Photo by Hyunmin Kim kimhyun81@

As the real estate market freezes, apartments in Seoul, including those in Gangnam, are being overlooked in the auction market. The winning bid rate has declined for two consecutive months, and the success rate has also decreased.

According to Gigi Auction, a data specialist in auctions and public sales, a total of 215 apartment auctions were held in Seoul from the 1st to the 29th of this month. Among them, 64 were successfully sold. The average number of bidders was 6.13. The success rate was 29.80%, and the winning bid rate was recorded at 80.10%.

The winning bid rate refers to the ratio of the winning bid price to the appraised value. It is one of the barometers showing the real estate market situation. When the market is good, auction demand surges, and the winning bid rate can exceed 100%. In June last year, the winning bid rate for Seoul apartments was 110%. However, as the real estate market cooled, it dropped from 86.7% in October to 80.7% in November, and further down to 80.1% in December.

Although the average number of bidders increased compared to November (5.53), the winning bid rate declined. This is because bidders are submitting lower prices due to concerns about market adjustments.

Reflecting this atmosphere, transactions are mainly occurring for low-priced properties. The apartment with the highest winning bid rate in Seoul this month was a residential-commercial complex apartment (84.78㎡) in Chang-dong, Dobong-gu, sold for 400 million KRW. Following that was the I-Park apartment (134.88㎡) in Deungchon-dong, Gangseo-gu, sold for 890 million KRW.

The past trend where reconstruction apartments in the Gangnam 3 districts (Gangnam, Seocho, Songpa) led the rise in winning bid rates has disappeared. This has caused the overall winning bid rate for Seoul apartments to fall. Among the apartments included in the top 10 winning bid rates, only two were located in the Gangnam 3 districts.

The winning bid rates for officetels and villas in Seoul auctions have fallen even more sharply than those for apartments. The decline in preference for officetels and villas is due to concerns about jeonse fraud and reverse jeonse issues.

From the 1st to the 29th, the winning bid rate for officetels was 76.10%, falling below 80% for the first time since September 2020. The winning bid rate for villas was 78.80%, dropping below 80% for the first time in half a year since June.

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