Apartment Auction Market 'Jupjup' Fever... Nationwide Apartment Winning Bid Rate Recovers to 30% Range

Gigi Auction 'January Auction Trend Report'
Seoul Apartment Winning Bid Rate Up 26.1 Percentage Points Compared to Previous Month

[Asia Economy Reporter Kwak Min-jae] As the auction market, which had frozen due to the real estate downturn, revives, the nationwide apartment auction success rate has recovered to 30%. It is analyzed that the success rate has recovered mainly in the metropolitan area due to the government's regulatory easing.

[Image provided by Gigi Auction]

According to the 'January 2023 Auction Trend Report' released by the court auction specialist company Gigi Auction on the 8th, the number of apartment auctions nationwide was 1,736, of which 634 were successfully auctioned. The success rate rose 9.0 percentage points from 27.5% in the previous month to 36.5%. The auction price rate was 75.8%, up 0.8 percentage points from 75.0% in the previous month. The average number of bidders was 5.9, similar to the previous month.

The apartment auction success rate in Seoul was 44.0%, up 26.1 percentage points from 17.9% in the previous month, and the auction price rate recorded 78.7%, up 2.2 percentage points from 76.5% in the previous month. The average number of bidders increased by 1.2 from 4.5 in the previous month to 5.6, recovering to the 5-bidder range for the first time in five months since August last year.

Gigi Auction explained, "As many apartments that had been repeatedly passed over were exhausted, the success rate rebounded, and among them, bidders flocked to apartments expected to have less downward price pressure due to expectations for reconstruction or remodeling, which also increased the average number of bidders."

The apartment auction success rate in Gyeonggi Province rose 4.5 percentage points from 25.0% in the previous month to 29.5%. The auction price rate remained at a similar level of 73.3% compared to 73.7% in the previous month. The average number of bidders increased by 0.5 from the previous month to 10.9, maintaining a high level in the 10-bidder range for two consecutive months. The apartment auction success rate in Incheon rose 6.1 percentage points from 23.1% in the previous month to 29.2%, and the auction price rate also increased by 4.8 percentage points from 68.0% in the previous month to 72.8%. The average number of bidders also increased by 2.7 to 8.3.

It is analyzed that the metropolitan apartment auction indicators rebounded as the government launched a large-scale real estate regulatory easing in January. However, the increase in the auction price rate was limited due to interest burdens caused by high interest rates.

The apartment auction price rates in the five major provincial metropolitan cities mostly remained slightly weak. The apartment auction price rate in Ulsan rose only 0.1 percentage points from the previous month to 76.7%. Busan (74.0%) decreased by 0.1 percentage points from the previous month, and Daejeon (70.8%) fell by 0.3 percentage points. Gwangju (80.1%) and Daegu (68.9%) dropped by 1.1 percentage points and 1.5 percentage points, respectively.

The success rate rose in all metropolitan cities except Daegu. The success rate in Daejeon rose 13.2 percentage points from 31.7% in the previous month to 44.9%, while Busan (24.4%), Gwangju (35.2%), and Ulsan (39.7%) increased by 5.4, 3.9, and 0.8 percentage points, respectively. Meanwhile, the apartment auction success rate in Daegu recorded an all-time low of 27.5%, down 5.8 percentage points from 33.3% in the previous month.

Among the eight provinces, Chungbuk's apartment auction price rate recorded 76.2%, up 7.5 percentage points from 68.7% in the previous month, and Jeonnam (80.5%) and Jeonbuk (82.7%) rose by 3.8 and 1.4 percentage points, respectively. The apartment auction price rate in Gyeongbuk (67.0%) plunged 12.1 percentage points from 79.1% in the previous month, showing the largest decline nationwide. Following that, Chungnam (75.2%) fell by 4.0 percentage points, and Gangwon (84.3%) and Gyeongnam (76.9%) dropped by 1.2 and 1.0 percentage points, respectively. Jeju, with two successful auctions, recorded an average auction price rate of 93.6%, and Sejong, with five successful auctions, recorded 71.4%.