After a ‘trade cliff’ hit the housing market, the apartment auction market is also rapidly freezing. Both the successful bid rate and the average number of bidders fell to their lowest levels in the year.
Apartment complex in Songpa and Seongnam direction as seen from Lotte Tower. Kyunghyang Newspaper file photo
According to the ‘December 2021 Auction Trend Report’ released by Gigi Auction, a court auction company, on the 10th, the number of apartment auctions nationwide was 1,245, of which 531 were successful.
As housing transactions decreased due to loan restrictions, etc., and the number of areas where apartment prices were falling spread, the enthusiasm of the auction market was also greatly dampened. According to the Gigi Auction tally, the nationwide apartment success rate, which had maintained the 50% range from January to November last year, fell 10.2 percentage points from November (52.9%), recording the lowest level of the year at 42.7%. The successful bid rate (actual successful bid price compared to appraised price) also recorded 100.6%, 3.6%p lower than the previous month (104.2%), and the average number of bidders was 5.1, the lowest of the year.
In particular, the success rate of apartment auctions in Seoul fell sharply. The successful bid rate in December was 46.9%, down 15.3 percentage points from the previous month (62.2%), breaking a new low for the year. This means that more than half of the real estate items at auction have never been found.
The number of apartment auctions in Seoul and the successful bid rate. Support Auction Offered
The successful bid rate also recorded 103.3%, 4.6 percentage points lower than the previous month (107.9%). This is a drop of 16.6 percentage points compared to last October (119.9%), which recorded an all-time high. The average number of bidders was 3.4, a marked decrease compared to other months. Gigi Auction said, “It is interpreted that buying power has sharply decreased due to the issue of continuous interest rate hikes and a raised loan threshold.”
In Incheon, which had the highest rate of increase in apartment prices last year, the apartment successful bid rate was 65.4%, up 2.6 percentage points from the previous month (62.8%). The average number of bidders also decreased by 1.1 from the previous month to 4.7, the lowest level for the year.
For apartments in Gyeonggi-do, the successful bid rate in December was 61.9%, down 14.1 percentage points from the previous month (76.0%). Among the five metropolitan cities, the rate of successful bids fell at the same time, and Ulsan recorded the largest drop in the rate of successful bids, dropping 14.2 percentage points from the previous month (108.2%) to 94.0%. Busan (94.7%) supported the second biggest drop, with the successful bid rate dropping 6.5 percentage points from the previous month (101.2%), and Daegu (95.1%) and Daejeon (97.1%) also fell 4.6 percentage points and 4.3 percentage points from the previous month, respectively. Auction said.
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