Seoul Apartment Prices Surge, Auction Market Overheats... Success Rate Tops 50% for First Time in 3 Years and 3 Months [Real Estate AtoZ]

Seoul Apartment Auction Success Rate Hits 50.2% in September
Highest Level Since June 2022
All Eight Units in Seongdong District Sold
Investors Flock to Hangang Belt Ahead of Land Transaction Permit Zone Designation

As apartment prices in Seoul continue to rise rapidly, the court auction market is also showing signs of overheating. In September, the auction success rate for apartments in Seoul surpassed 50% for the first time in three years and three months. Notably, high-priced winning bids far exceeding the appraised value are frequently occurring, especially in the so-called "Hangang Belt" areas that are not subject to regulations.

A view of apartment complexes in downtown Seoul from Namsan, Seoul. Photo by Dongju Yoon

According to an analysis by auction information provider GG Auction on September 28, the auction success rate for Seoul apartments in September reached 50.2%. Out of 209 auctions conducted, 105 apartments found new owners. This is the first time since June 2022 (56.1%) that the success rate for Seoul apartments has exceeded 50%. The winning bid-to-appraisal ratio also averaged 97.3%, the highest level since June (98.5%), prior to the implementation of the June 27 lending restrictions.

The overheating trend is particularly evident in non-regulated "Hangang Belt" districts such as Mapo, Seongdong, Gwangjin, and Dongjak. In September, the average winning bid-to-appraisal ratios in Seongdong District (104.4%) and Mapo District (103.3%) both exceeded 100%. As apartment prices in these areas have surged recently and the possibility of additional regulations, such as designation as land transaction permit zones, has increased, buyers are flocking to the auction market to purchase homes before new restrictions are implemented.

In particular, Seongdong District recorded a 100% auction success rate this month, with all eight apartments put up for auction being sold. On September 15, a 60-square-meter unit at Ten’s Hill in Hawangsimni-dong attracted 20 bidders and was sold for 1.5319 billion won, which is 125% of its appraised value of 1.23 billion won. On the same day, a 84-square-meter unit at Daelim Riverside Town in Eungbong-dong also found a new owner after 15 bidders competed, with the final price reaching 1.6211 billion won, or 113% of its appraised value.

The auction fever is also intense in other Hangang Belt areas. In Sangdo-dong, Dongjak District, a 84.8-square-meter unit at Sangdo Hyosung Harrington Place drew as many as 39 bidders and was sold for 1.35432 billion won, or 113.8% of its appraised value. Ji Juhyun, a senior analyst at GG Auction, said, "The auction fever in the Hangang Belt is now spreading to northern districts of Seoul, including Dongdaemun District. Even if these areas are designated as land transaction permit zones, properties purchased through auctions do not require transaction permits, and if buyers avoid using mortgage loans, there is no obligation for actual occupancy. As a result, investor interest is unlikely to wane easily."