"COVID-19 Defeated Auction Fever"... April Metropolitan Area Winning Bid Rate Exceeds 90%

13,784 Nationwide Auction Cases in April
Postponement of Auctions Scheduled for February and March
Consistent Increase in Winning Bid Rates for Residential Facilities in Incheon, Gyeonggi, and More

[Asia Economy Reporter Onyu Lim] The auction market heated up intensely in April. Despite concerns about a real estate downturn due to the novel coronavirus infection (COVID-19), the market instead showed a boom. In particular, for residential facilities in the Seoul metropolitan area, the winning bid rate exceeded 90% for the first time in about two years, indicating intensified competition among bidders.

According to the auction trend report announced by Gigi Auction on the 11th, the number of nationwide auctions conducted in April was recorded at 13,784 cases. This is an increase of more than 2,000 cases compared to January (11,536 cases) and February (11,723 cases). This is the result of changes in auction dates originally scheduled for February and March due to the unprecedented court recess caused by COVID-19.

Among the cases conducted, a total of 4,574 were successfully auctioned. As a result, the success rate was recorded at 33.2%, the winning bid rate at 71.1%, and the average number of bidders at 4.5. Judging by these indicators, the auction market is rather booming. A Gigi Auction official explained, "Considering that there are still items waiting after the date changes processed in March, the increase in items is expected to continue for some time."

Interest in residential facilities was particularly noticeable. The nationwide winning bid rate for residential facilities was recorded at 84.5%, the highest this year. Although the number of successful auctions increased by 176 cases from 2,063 in February to 2,239, the average number of bidders remained the same at 6.3. This reflects the market’s heat.

Especially, the winning bid rate for residential facilities in the Seoul metropolitan area reached 91.2%, surpassing 90% for the first time since October 2018 (90%). The winning bid rate in Incheon, which is attracting attention as a non-regulated area in the metropolitan area, rose significantly to 92.5%, and Gyeonggi, where the regulated areas were expanded by the February 20th measures, also showed a steady upward trend at 89%.

Seoul recorded a winning bid rate of 97.1%, tying with Daejeon (97.1%) for the highest nationwide winning bid rate for residential facilities. A Gigi Auction official said, "However, due to strengthened loan regulations raising the entry barrier, the average number of bidders was only 3.8, one of the lowest nationwide," adding, "While strong loan regulations have reduced excessive competition for high-priced housing, intensified competition for small and medium-sized residential facilities seems inevitable."