Seoul Apartment Winning Bid Rate Declines for 4 Consecutive Months
Seoul Area Sees Decrease in Winning Rate and Average Number of Bidders Compared to Previous Month
Gyeonggi-do and Incheon Auction Indicators Rise Amid Increased Demand for Mid-Low Priced Apartments
[Asia Economy Reporter Hwang Seoyul] The Seoul apartment bid-to-sale ratio fell below 100% for the first time in a year, while Gyeonggi and Incheon saw increases.
According to the ‘February 2022 Auction Trend Report’ by Gigi Auction, a court auction specialist company, the bid-to-sale ratio for Seoul apartments recorded 97.3%, dropping below 100% for the first time since February last year (99.9%). It has been declining for four consecutive months since October last year (119.9%→107.9%→103.3%→103.1%→97.3%).
The auction success rate for Seoul apartments rose 1.4 percentage points from the previous month (48.6%) to 50.0%, but it remains significantly lower compared to the same month last year (80.0%). The average number of bidders also decreased by 1.0 from the previous month to 5.4. A Gigi Auction official stated, "The auction market for Seoul apartments is cooling down due to strengthened loan regulations and interest rate hikes."
The bid-to-sale ratio indicates the ratio of the winning bid price to the appraised value; a figure above 100% means the winning bid price exceeded the appraised value. The auction success rate is the ratio of items with confirmed winning bidders among those put up for bidding.
Meanwhile, both the auction success rate and bid-to-sale ratio for apartments in Gyeonggi Province and Incheon increased. The auction success rate for Gyeonggi apartments rose 1.8 percentage points from the previous month to 56.3%, and the bid-to-sale ratio slightly increased from 103.3% to 103.8%. Incheon’s apartment auction success rate surged to 78.3% from 56.4% the previous month, and the bid-to-sale ratio rose by 4.0 percentage points to 113.2%.
Gigi Auction analyzed that the auction indicators rose as demand for mid- to low-priced apartments under 600 million KRW entered the auction market, mainly in some areas of Gyeonggi and Incheon.
Among the five major metropolitan cities outside the capital area, apartment bid-to-sale ratios rose in all regions except Daegu. Daejeon (94.0%) and Ulsan (95.6%) increased by 2.8 percentage points from the previous month, while Gwangju (97.8%) and Busan (96.5%) rose by 2.5 and 2.3 percentage points, respectively. Daegu’s bid-to-sale ratio fell by 1.0 percentage point from 89.9% to 88.9%, marking two consecutive months in the 80% range.
Among the eight provinces, Jeju, where a total of two apartments were auctioned, showed the highest increase in bid-to-sale ratio, rising 17.3 percentage points from 97.3% last month to 114.6%. Additionally, bid-to-sale ratios rose in Jeonbuk (97.5%), Gyeongnam (97.7%), Chungnam (95.9%), and Chungbuk (93.8%) compared to the previous month. Meanwhile, Gangwon (99.9%), Jeonnam (88.2%), and Gyeongbuk (86.3%) saw declines in their bid-to-sale ratios from the previous month.
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