The successful bid rate for apartment auctions in Seoul topped 97% last year, hitting a record high for the first time in four years. As apartment prices continued to rise and a series of real estate regulations were applied across Seoul, investment demand appears to have flocked to auctions, which are recognized as exceptions to the land transaction permission system.
According to GGAuction, a court auction specialist, on the 4th, last year's successful bid rate for Seoul apartments (the ratio of winning bids to appraised value) averaged 97.3%. That is the highest in four years since 2021 (112.9%).
The popularity of Seoul apartments in the auction market stemmed from the continued uptrend in home prices along with the government's successive enforcement of strong lending regulations. In particular, when the entire city of Seoul was designated as a land transaction permission zone under the Oct. 15 measures, auction demand surged. In auctions, an exception is recognized to the land transaction permission system, so buyers do not need to obtain transaction approval from the competent district office, and gap investments (purchases with jeonse in place) are also possible.
The auction successful bid rate rose from 99.5% in September last year to 102.3% in October, the first time it topped 100%, when the Oct. 15 measures were announced. It then topped 100% for three consecutive months through December last year. The December successful bid rate was 102.9%, the highest in three years and six months since June 2022 (110.0%).
As the auction market overheated, the success rate (the ratio of successful bids to the number of auctions held) also rose. Of the 2,333 items put up for auction last year, 49% (1,144 items), nearly half, were successfully bid on. That is the highest level since 2021 (73.9%).
The average number of bidders per item was 8.19, the most in eight years since 2017 (8.72).
Districts with high auction demand were the Gangnam area and the Han River belt. Of the 25 districts in total last year, nine recorded a successful bid rate above 100%. Among them, Seongdong District recorded the highest at 110.5%.
Next were Gangnam District at 104.8%, Gwangjin District and Songpa District at 102.9% each. Yeongdeungpo District (101.9%), Dongjak District (101.6%), Jung District (101.4%), Mapo District (101.1%), and Gangdong District (100.7%) also topped 100%.
Most of the top 10 complexes by successful bid rate were also located in the three Gangnam districts (Gangnam, Seocho, and Songpa) and the Han River belt. The top complex by successful bid rate last year was a 60-square-meter exclusive-use unit at Doosan Apartment in Geumho-dong 3-ga, Seongdong District, Seoul, put up for auction on Nov. 24. Appraised at 835 million won, the property was sold for 1.3375 billion won. The successful bid rate was 160.2%.
Next, a 106.5-square-meter exclusive-use unit at Miseong Apartment in Apgujeong-dong, Gangnam District, Seoul, was sold on Sept. 30 last year for 5.20822 billion won, more than 1.8 billion won above its appraised value (3.4 billion won). The successful bid rate was 153.2%.
A 60-square-meter exclusive-use unit at Cheonggu Riverside Apartment in Seongsu-dong 2-ga, Seongdong District, Seoul, which was bid on the 1st of last month, was also sold for 2.755 billion won, which is 150.6% of the appraised value (1.829 billion won).