Editor’s Note
This analysis highlights a robust real estate market in Seoul, with last year’s average successful bid price ratio reaching 97.3%. The data reveals a clear concentration of high-value transactions in the premium Gangnam 3 districts and the Han River belt, underscoring persistent demand in these coveted areas.
Last year, the successful bid price ratio for Seoul apartment auctions hit its highest level since 2021. This is the result of investment demand flocking to the auction market as a way to circumvent regulations, a rebound effect following the government’s high-intensity measures (the Oct. 15 measures) to curb housing prices. This is the so-called ‘balloon effect’.
According to the court auction specialist firm Jijio Auction, the average successful bid price ratio (the ratio of the successful bid price to the appraised value) for Seoul apartments last year was 97.3%. This is the highest level in four years since 2021 (112.9%), a period of rapid price increases.
The successful bid price ratio for Seoul apartments fell to 82.5% in 2023 but rebounded to 92.0% in 2024, solidifying its upward trend last year with a further increase of 5.3 percentage points. Notably, the successful bid price ratio in December last year reached 102.9%, exceeding 100% for three consecutive months and marking the highest level in three and a half years since June 2022.
Analysis suggests this overheating stems from government regulations. After the entire Seoul area was designated as a Land Transaction Permit Zone under the Oct. 15 measures, the general sales market faced a transaction cliff. In fact, the volume of Seoul apartment transactions plummeted from over 8,000 cases in September-October last year to 2,786 cases in November following the announcement of the measures.
In contrast, auctions attracted a large influx of investors because they do not require land transaction permits and allow for ‘gap investment’ (leveraging the difference between jeonse deposit and sale price) without an obligation for actual residence.
Consequently, auction competition rates also soared. The average number of bidders last year was 8.19, the highest in eight years since 2017 (8.72). The successful bid rate (successful bids relative to total auction listings) also reached 49%, meaning one out of every two auctioned properties found a new owner.
Regionally, the concentration in the ‘Gangnam 3 Districts’ and the ‘Han River Belt’ was evident. Among 25 autonomous districts, a total of nine exceeded a 100% successful bid price ratio. Seongdong-gu ranked first at 110.5%, followed by Gangnam-gu (104.8%), and Gwangjin/Songpa-gu (102.9%). Yeongdeungpo, Dongjak, Jung-gu, Mapo, and Gangdong-gu also had successful bid price ratios exceeding 100%.
Major high-price successful bid cases were also concentrated in these areas. Last year’s highest successful bid price ratio was for the ‘Doosan Apartment’ (exclusive area 60㎡) in Geumho-dong 3-ga, Seongdong-gu in November, which was successfully bid at 1.3375 billion won, 160.2% of the appraised value, after attracting 40 bidders. The ‘Miseong Apartment’ (exclusive area 106.5㎡) in Apgujeong-dong, Gangnam-gu found a new owner at 5.20822 billion won, 1.8 billion won higher than the appraised value (successful bid ratio 153.2%). The ‘Cheonggu Riverside Apartment’ (exclusive area 60㎡) in Seongsu-dong 2-ga, Seongdong-gu, benefiting from the Seongsu Strategic Redevelopment Zone, was sold for 2.755 billion won, 150.6% of the appraised value.
