Seoul Apartment Winning Bid Rate Recovers to 80% Range... Gangnam Reconstruction Drives Increase

The Seoul apartment bid-to-price ratio has recovered to the 80% range for the first time in six months. This is attributed to a significant increase in the number of bidders, mainly centered on reconstruction apartments in the so-called Gangnam 3 districts (Gangnam, Seocho, Songpa).

Seoul Apartment Auction Index Trends.
[Image provided by ZigZag Auction]

According to the ‘May 2023 Auction Trend Report’ released on the 9th by Gigi Auction, a company specializing in auction and public sale data, the Seoul apartment auction success rate rose by 5.8 percentage points from 19.0% in the previous month to 24.8%. The bid-to-price ratio increased by 4.6 percentage points from 76.5% in the previous month to 81.1%, recovering to the 80% range for the first time in six months since November 2022 (83.6%).

Among the apartments auctioned last month in the Gangnam 3 districts, reconstruction-planned apartments such as Eunma in Daechi-dong, Sinbanpo 2nd Complex in Jamwon-dong, and Jamsil Jugong (share) in Jamsil-dong gained popularity, driving the rise in Seoul apartment bid-to-price ratios.

In particular, the average number of bidders in the Gangnam 3 districts reached 12.7, marking the highest level in 2 years and 3 months since February 2021 (17.7). Senior researcher Lee Joo-hyun of Gigi Auction explained, “This is analyzed as an increase in buying demand due to expectations of eased reconstruction regulations and relaxation of loan restrictions on ultra-high-priced apartments in regulated areas.”

Nationwide, there were 2,330 apartment auctions, of which 737 were successful. The success rate was 31.6%, down 8.1 percentage points from 39.7% in the previous month. The bid-to-price ratio recorded 75.9%, up 0.9 percentage points from 75.0% in the previous month, remaining in the 75% range for three consecutive months since March, showing a relatively stable trend. The average number of bidders increased by 0.3 from 7.9 in the previous month to 8.2.

In Gyeonggi Province, the apartment auction success rate was 33.6%, down 7.6 percentage points from 41.2% in the previous month, while the bid-to-price ratio was 74.5%, similar to 74.1% in the previous month. The average number of bidders increased by 3.0 from 9.9 in the previous month to 12.9.

In Incheon, the apartment auction success rate rose by 8.4 percentage points from 20.4% in the previous month to 28.8%. The bid-to-price ratio increased by 2.6 percentage points from 70.2% in the previous month to 72.8%, and the average number of bidders rose by 1.2 from 8.3 in the previous month to 9.5.

Among the five major metropolitan cities in the provinces, the apartment bid-to-price ratios in Gwangju, Busan, and Daegu increased. Gwangju’s apartment bid-to-price ratio rose by 2.7 percentage points from 75.1% in the previous month to 77.8%, while Busan (73.3%) and Daegu (73.1%) each increased by 1.6 percentage points. On the other hand, Ulsan’s apartment bid-to-price ratio fell by 2.8 percentage points from 79.0% in the previous month to 76.2%, and Daejeon dropped by 0.8 percentage points to 73.9%.

Among the eight provinces, Jeonbuk (81.1%) rose by 2.9 percentage points from the previous month, surpassing 80% for the first time in four months. Following were Chungbuk (78.1%) and Chungnam (76.6%), which increased by 1.0 and 0.8 percentage points, respectively.

Gyeongbuk’s apartment bid-to-price ratio showed a significant decline, dropping 8.2 percentage points from 78.8% in the previous month to 70.6%, and Gangwon (82.4%) also fell by 6.7 percentage points from 89.1%. Jeonnam (77.8%) and Gyeongnam (78.1%) decreased by 3.5 and 1.6 percentage points, respectively.

Jeju, with five successful auctions, recorded a bid-to-price ratio of 78.2%, and Sejong, with six successful auctions, recorded 75.3%.