Helio City 130㎡ Unit Sold at Auction for 3.11 Billion KRW
Over 100 Million KRW Higher Than Recent Actual Transaction Price of 2.97 Billion KRW
Winning Bid Rate Seen as Leading Real Estate Indicator... Seoul's Strength Expected to Continue
Provincial Winning Bid Rates Struggle to Stay Above 70%... Polarization Deepens
Recently, a court auction case involving a 130.06㎡ exclusive area unit in Helio City, Songpa-gu, Seoul, has become a hot topic. Since it is a newly built complex even within Songpa, cases of this complex coming up for auction are rare. However, the property, listed as a 'new case' with no history of failed bids, was immediately sold, attracting attention. Notably, the starting auction price was 3.05 billion KRW, which was 100% of the appraised value, but the final bid was decided at 3.111111 billion KRW, exceeding the starting price. This is higher than the recent actual transaction price (2.97 billion KRW in December 2024). Although the actual transaction was for an 8th-floor unit and the auctioned unit is on the 16th floor, which can be considered a better location, the fact that the winning bid surpassed the actual transaction price itself is considered unusual.
Strong demand in premium areas... Songpa stirs up after lifting of land transaction permit system
Lee Joo-hyun, a senior research fellow at Giji Auction, analyzed, "It is very rare for auction winning bids to surpass actual transaction prices," adding, "This indicates that demand in premium areas is very solid." He further explained, "Although transactions in the Songpa area are not frequent, the asking prices themselves are very high, so those who won the auction might even feel they 'bought it cheaply'."
As of the 24th, the asking price for a 130.06㎡ unit in Helio City ranges from a minimum of 3.2 billion KRW to a maximum of 3.4 billion KRW. This is several hundred million KRW higher than the actual transaction price two months ago. Analysts suggest that the lifting of the land transaction permit system (Toheoje) in the so-called Jam·Sam·Dae·Cheong (Jamsil, Samsung-dong, Daechi-dong, Cheongdam-dong) areas is also influencing housing prices in adjacent regions. In the case of Helio City, it appears to be affected by the housing price increase in Jamsil.
Lee said, "Apartments in the Jam·Sam·Dae·Cheong areas were occasionally auctioned until last year, but this year they will be very hard to find," adding, "Since price prospects are good, an environment where houses can be easily liquidated even without going through auctions will be created." According to the Korea Real Estate Agency's 'Weekly Apartment Trend for the 3rd Week of February,' apartment prices in Songpa-gu rose by 0.36% compared to the previous week, the highest among Seoul's 25 districts.
Warmth is also felt in the auction market of Gangdong-gu, a neighboring district of Songpa-gu. This month, Goduk Gracium (exclusive area 59.78㎡) and Goduk Arteon (exclusive area 84.97㎡), which found new owners through court auctions, recorded winning bid rates (winning bid amount compared to appraised value) exceeding 100%. This is so-called 'high-price winning bids.' Goduk Gracium was auctioned at an appraised value of 1.21 billion KRW and sold for 1.413 billion KRW (winning bid rate 117%). The winning bid rate for Goduk Arteon in Gangdong was 103% (appraised value 1.56 billion KRW, winning bid 1.607 billion KRW). Although the winning bids for the two complexes were lower than recent actual transaction prices, the difference was less than 100 million KRW.
Decline continues in provinces... Has Songpa-originated 'super polarization' begun?
The polarization between Seoul and the provinces is intensifying. The average winning bid rate for apartments in Seoul was 92.30% as of January this year, exceeding both the 2024 average (90.10%) and the previous month's average (89.40%). On the other hand, among the five major metropolitan cities in the provinces (Busan, Daegu, Daejeon, Gwangju, Ulsan), four cities except Busan had January winning bid rates below the 2024 average. Daegu (72.00%) and Daejeon (72.20%) are even struggling to maintain the 70% level. 'High-price winning bids' are a distant story in the provinces. Due to accumulated unsold inventory and relatively more new supply compared to Seoul, a rebound seems difficult for the time being.
The auction winning bid rate is considered one of the leading indicators of the real estate market. It shows the temperature difference between market prices and appraised values. If the outlook is that real estate prices will rise, aggressive bidding naturally raises the winning bid rate. Bidders aim to win even at high prices. During the real estate boom in 2021, there were cases where auction winning bids surpassed actual transaction records. Some say that 'Songpa-originated super polarization' has begun.
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