July Bid Rate Records 35.8%... Highest in 1 Year
Bid Price Rate Also Slightly Rises... "Not a Complete Recovery"
Increase in Units Sold Boosts Housing Market Activity
On the 13th of last month, Cheongna Well County 1st Phase in Seo-gu, Incheon was auctioned off at 87% of the appraised value at the Incheon District Court. After failing once in June, the minimum bid price dropped to 374.5 million KRW, but with 26 bidders competing, it found a new owner at 468.109 million KRW, about 100 million KRW higher than that. This price surpasses the highest actual transaction price of 466.5 million KRW in July.
A favorable breeze is blowing in Incheon, where the housing price decline was the deepest in the metropolitan area. Apartment prices have risen for nine consecutive weeks, reviving buyer sentiment, and the auction market's success rate has reached its highest point in a year. Concerns about unsold units are gradually decreasing compared to before, creating an atmosphere of gradual market stabilization.
According to court auction information provider Gigi Auction on the 8th, the apartment auction success rate in Incheon in July was 35.8%. This means that more than one out of every three apartments put up for auction was sold. The Incheon apartment auction success rate had remained in the 20% range from November last year to June this year but recovered to the 30% range after nine months. This is the highest figure since June last year (50.80%).
The auction price-to-appraisal ratio in July also rose to 75.30%, marking five consecutive months of increase. It recorded the 66% range in February, surpassed 70% in April, and broke through 75% in July. Senior researcher Lee Joo-hyun of Gigi Auction explained, "The improvement in Incheon apartment auction success rates is due to demand using special home loan programs," adding, "However, since the price-to-appraisal ratio is still in the 70% range, it is too early to say the market has fully recovered."
The slight change in auction indicators is interpreted as a result of the recent turnaround in the Incheon real estate market atmosphere. According to the Korea Real Estate Board, Incheon apartment sale prices have been rising for nine consecutive weeks from the first week of June to the fifth week of July. As a result, rebound transactions can be easily found. For example, an 84.9㎡ (exclusive area) unit in Songdo The Sharp First Park, Songdo-dong, Yeonsu-gu, changed hands for 1 billion KRW on the 2nd of last month. It was traded for 760 million KRW in December last year, meaning it sold for 240 million KRW more in just half a year. An 84.9㎡ unit in Cheongna Central Aileen's Garden, Cheongna-dong, Seo-gu, was contracted for 700 million KRW on the 5th of last month, which is 110 million KRW higher than the actual transaction price of 590 million KRW at the end of December last year. As actual transaction prices gradually rise with the recovery of buyer sentiment, more people are trying to secure their homes more cheaply through auctions.
Not only in the auction market but also in the pre-sale market, a change in atmosphere is being detected. The Incheon pre-sale market had significant concerns about unsold units due to economic recession and oversupply of move-in units. However, recently, Doosan We've Central in Dong-gu and Jakjeon Hanla Vivaldi in Gyeyang-gu have sold out all unsold units successfully. In the case of Hoban Summit in Geomdan New Town AB19 Block, where the main subscription took place last month, 7,980 people applied for 229 units, recording a first-rank competition rate of 34.8 to 1.
Yeokyung Hee, senior researcher at Real Estate R114, analyzed, "The perception that Incheon apartment prices have passed the bottom is spreading recently, and with increased preference for apartments due to rental scams, urgent sale properties are being resolved, improving buyer sentiment."
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