Warm Auction Atmosphere... Nationwide Apartment Successful Bids Reach Highest in 2 Years and 11 Months

Maximum Number of Successful Bids Since February 2021
January Nationwide Apartment Bid Success Rate 83.2%
Seoul Apartment Auctions Also Warming Up, Sharp Increase in Successful Bids
Seoul Bid Success Rate 86.2%, Up 6.1%p from December

The real estate auction market is warming up. Last month, the number of apartment auction sales was the highest since February 2021. In particular, the number of successful bids for Seoul apartments increased compared to the previous month, and the bid-to-appraisal ratio also rose significantly during the same period.

Number of Apartment Auction Wins and Winning Bid Rates Nationwide Over the Past 3 Years (Source: Gigi Auction)

According to auction information company Gigi Auction on the 6th, the number of apartment auctions nationwide in January this year was 2,862, with 1,109 successful bids. Among these, the number of successful auction bids was the highest since February 2021 (1,147 cases).

The nationwide apartment auction bid-to-appraisal ratio in January recorded 83.2%, up 1.5 percentage points from the previous month (81.7%). The bid-to-appraisal ratio had slightly decreased since October last year (84.1%) but is now rebounding. The bid-to-appraisal ratio refers to the ratio of the final bid price to the initial appraisal price. An increase in this ratio means the final bid price is approaching the appraisal value. Since auction prices are generally determined based on the lowest asking prices and actual transaction prices of similar properties, a bid price close to the appraisal value indicates heightened expectations for rising housing prices.

In particular, the Seoul apartment auction market is showing signs of revival. Changes such as an increase in successful bids were observed last month. Both the number of auction cases and successful bids in Seoul in January were the highest in the past three years. Last month, Seoul recorded 313 auction cases and 118 successful bids, increasing by 45.5% and 84.4% respectively compared to the previous month. The auction success rate for Seoul apartments was 37.7%, the highest since July 2023 (37.9%). The bid-to-appraisal ratio for Seoul apartments in January was 86.2%, up 6.1 percentage points from the previous month (80.10%). The bid-to-appraisal ratio for Seoul apartments maintained the 70% range from December 2022 to April last year, then fluctuated in the 80% range from May last year onward.

Number of Successful Apartment Auction Bids and Auction Price Rates in Seoul Over the Past 3 Years (Source: Gigi Auction)

The increasing influx of people into the auction market is analyzed as a result of more properties entering the auction market due to the real estate transaction freeze and growing demand to purchase real estate at lower prices amid economic uncertainties. Senior researcher Joo Hyun Lee of Gigi Auction explained, "In Seoul, the bid-to-appraisal ratio for apartments in the Gangnam area is at a high level, and the number of properties coming to auction is also increasing. Properties in areas with good living conditions attract demand and have high bid-to-appraisal ratios. Especially, areas designated as land transaction permission zones are more popular in the auction market."

As of January this year, Gyeonggi-do and Incheon recorded 704 auction cases and 340 successful bids. The success rate in January was 48.3%, the highest since June 2022. In non-metropolitan areas, 1,844 auctions were conducted in January, with 650 successful bids. The bid-to-appraisal ratio in non-metropolitan areas maintained the 70% range since November 2022, rose to the low 80% range in September and October last year, but was only 80.6% as of January.

Senior researcher Joo Hyun Lee said, "It is difficult to say that there is a full-fledged upward trend in provincial areas. Last year, special home loan programs such as the Special Bogeumjari Loan were available, and low fixed interest rates could be used for low-priced apartments, which caused the bid-to-appraisal ratio to rebound, but the current situation is not favorable."