Seoul Apartment Auction Success Rate Hits Lowest in 13 Years... Frozen Auction Market

Giji Auction, 'July 2022 Auction Trend Report'
National Winning Bid Rate 90.6%... Lowest This Year
Gangwon Shows Strength Despite Overall Auction Indicator Decline

Number of Apartment Auctions Nationwide and Winning Bid Rate / Data provided by Gigi Auction

[Asia Economy Reporter Hwang Seoyul] The auction success rate for apartments in Seoul has hit its lowest point in over 13 years. The nationwide apartment auction price-to-appraisal ratio has also reached its lowest level this year, reflecting the frozen atmosphere in the auction market.

According to the 'July 2022 Auction Trend Report' released on the 11th by Gigi Auction, a court auction specialist company, there were 1,262 apartment auctions nationwide, of which 546 were successfully sold. The success rate was 43.3%, down 1.7 percentage points from the previous month (45.0%). The price-to-appraisal ratio recorded 90.6%, 3.2 percentage points lower than the previous month (93.8%), marking a decline for three consecutive months since May this year (94.3% → 93.8% → 90.6%). The average number of bidders was 5.8, the lowest figure recorded this year.

Number of Seoul Apartment Auction Cases, Winning Bid Rate, and Auction Success Rate / Data=ZigZag Auction

The auction success rate for apartments in Seoul was 26.6%, a drop of 29.5 percentage points from the previous month (56.1%). This is the lowest figure in 13 years and 7 months since December 2008 (22.5%). The price-to-appraisal ratio fell 13.4 percentage points from the previous month (110.0%) to 96.6%, and the average number of bidders also dropped by 0.6 from 3.6 to 3.0, marking the lowest this year. Continued loan regulations, interest rate hikes, and a cooling sales market appear to have influenced the decline in auction indicators.

The auction success rate for apartments in Gyeonggi Province was 45.6%, down 0.8 percentage points from the previous month (46.4%). The price-to-appraisal ratio rose 1.9 percentage points to 92.6% from the previous month (90.7%). The average number of bidders increased by 2.4 from 8.0 to 10.3. In Gyeonggi Province, demand concentrated on apartments priced below 200 million KRW appraisal value, causing slight increases in both the price-to-appraisal ratio and average number of bidders.

The auction success rate for apartments in Incheon was 31.3%, marking the third lowest success rate ever recorded. The price-to-appraisal ratio (89.1%) remained similar to the previous month (88.8%), staying in the 80% range for two consecutive months. The average number of bidders dropped by 0.9 from 5.4 to 4.5, the lowest this year.

Daejeon Apartment Auction Cases and Winning Bid Rate Trends / Data by Gigi Auction

Among the five major metropolitan cities outside Seoul, Daejeon saw a significant drop in apartment price-to-appraisal ratio. Daejeon's ratio was 76.2%, down 12.2 percentage points from the previous month (88.4%), entering the 70% range for the first time in 8 years since June 2014. Ulsan (86.5%) fell 6.8 percentage points from the previous month, while Busan (91.4%) and Gwangju (92.5%) dropped 4.5 and 3.5 percentage points respectively. Daegu (81.5%) maintained its price-to-appraisal ratio in the 80% range for three consecutive months.

Among the eight provinces, Gangwon's apartment price-to-appraisal ratio remains strong. Gangwon's ratio was 107.9%, slightly down 0.4 percentage points from the previous month (108.2%), but still the highest nationwide. Jeonbuk's apartment price-to-appraisal ratio rose 13.3 percentage points to 99.1%, and Chungnam's increased 1.7 percentage points to 92.3%.

Gyeongbuk (84.7%) dropped 7.2 percentage points from the previous month (91.9%). Jeonnam (84.5%) fell 2.9 percentage points, while Gyeongnam (89.0%) and Chungbuk (84.0%) each declined by 0.5 percentage points. Jeju, with 3 successful auctions, recorded a price-to-appraisal ratio of 89.8%, and Sejong, with 5 successful auctions, recorded 74.5%.