[Asia Economy Reporter Ryu Tae-min] The court auction market, considered a leading indicator of the real estate market, is reviving. The bid-to-appraisal ratio for Seoul apartments, which had been declining, rebounded after six months, reaching the highest level this year. This is interpreted as a result of growing market expectations regarding the real estate policies to be promoted by the new government.
According to Gigi Auction, a court auction specialist company, the average bid-to-appraisal ratio for apartment auctions in Seoul this month was 104.3%. This means that an apartment appraised at 100 million KRW was sold at 104.3 million KRW. This figure is 8.0 percentage points higher than last month’s 96.3%, marking the highest level so far this year. The bid-to-appraisal ratio for Seoul apartments had exceeded 110% for seven consecutive months since the first half of last year, setting a record high five times, but it declined for five consecutive months starting from November last year. However, this month, demand surged due to expectations of easing real estate market regulations, causing a rebound after half a year, according to Gigi Auction.
Along with the bid-to-appraisal ratio, the other two major auction indicators?bid success rate and number of bidders?also turned strong. The average bid success rate in Seoul rose for four consecutive months to 56.4%. The bid success rate represents the ratio of successful bids to the number of auctioned properties. The number of bidders also increased. The average number of bidders dropped to 2.8 in November last year but has been rising since then, reaching 6.5 this month.
The metropolitan area outside Seoul is also showing signs of revival. This month, the bid-to-appraisal ratio for apartments in Incheon rose 7.4 percentage points from the previous month to 109.4%. In Gyeonggi Province, demand surged for apartments priced below 600 million KRW, which are easier to finance, causing the average number of bidders to jump from 8.09 last month to 11.03 this month.
In fact, on the 18th, an apartment in Ogeum-dong, Songpa-gu, Seoul, with an exclusive area of 144㎡, attracted 11 bidders and was sold at 1.452 billion KRW, which is 422 million KRW higher than the appraisal price of 1.03 billion KRW. On the 4th, an apartment in Saengyeon-dong, Dongducheon-si, Gyeonggi Province, with an area of 104㎡, attracted 48 bidders and was sold at 223.9 million KRW, which is 12.9 million KRW higher than the appraisal price of 121 million KRW.
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