Seoul Apartment Auction Price Ratio Hits 98.5%, Highest in Three Years

Auction Price Ratio Expected to Slow Down
After June 27 Policy Measures

The auction price ratio (the ratio of the final auction price to the appraised value) for apartments in Seoul has reached its highest level in three years. However, analysts predict that the upward trend is likely to slow following the government's June 27 real estate policy measures.

According to the "June Auction Market Report" released by auction data specialist company GGI Auction on July 8, the number of apartment auctions nationwide last month reached 3,013, a 4% increase from the previous month. The successful bid rate (the percentage of auctioned properties that are ultimately sold) rose by 4 percentage points to 42.7% from 38.7% in the previous month. The auction price ratio fell slightly by 0.2 percentage points to 87.6%, but the overall average remained robust due to high auction price ratios in certain areas, including Seoul and Sejong. The average number of bidders was 8.5, similar to the previous month.

In Seoul, the successful bid rate for apartments was 46.5%, the highest in five months, and the auction price ratio rose by 0.8 percentage points to 98.5% from 97.7% the previous month. Notably, the proportion of properties sold in the first round accounted for 31% of all auctions, contributing to the higher successful bid rate. GGI Auction stated, "This is attributed not only to high-priced bids in the Gangnam area but also in outlying districts such as Nowon, Dobong, and Guro." However, the company added, "With the June 27 measures, loan limits have been sharply reduced, and investment demand is expected to be virtually blocked, so the upward trend in auction price ratios is likely to slow." The average number of bidders increased by 0.7 to 9.2 compared to the previous month.

In Gyeonggi Province, the successful bid rate was 51.2%, and the auction price ratio was 89.7%, rising by 5.7 and 2.1 percentage points, respectively. The increase in high-priced bids in Bundang and Suji led to the highest levels since August last year. The average number of bidders was 11.1, up by 1.2 from the previous month.

In Incheon, the successful bid rate rose to 40.4%, but the auction price ratio fell by 3.2 percentage points to 79.0%, dropping below 80% again after just one month. This is attributed to LH purchasing homes affected by Jeonse fraud in Michuhol-gu at low prices. The average number of bidders was 7.5, a decrease of 2.7 from the previous month.

Among the five major metropolitan cities outside the capital, Busan's auction price ratio surpassed 80% for the first time in ten months, reaching 81.8%. Gwangju recorded its highest level this year at 83.9%. Daegu's ratio was similar to the previous month at 83.2%, but Daejeon saw a sharp drop of 14.9 percentage points to 67.0%, the second lowest on record. Ulsan's ratio fell by 2.0 percentage points to 85.2%.

In the eight provincial regions, most areas showed a downward trend. Chungnam (78.6%) fell back into the 70% range for the first time in three months, while Jeonbuk (87.2%) and Jeonnam (76.0%) dropped by 4.5 and 3.4 percentage points, respectively. Gyeongbuk (78.9%) and Chungbuk (81.7%) also saw slight declines, while Gyeongnam (80.7%) and Gangwon (87.3%) remained at similar levels to the previous month.

On Jeju Island, 8 out of 21 properties were sold at auction, resulting in an auction price ratio of 86.9%. In Sejong, 5 out of 16 properties were successfully auctioned, with a ratio of 92.4%.