Seoul Apartment Auction Prices Fall Below Appraisals for First Time in Five Months

Seoul’s apartment auction market slipped below appraised value in August, ending a five-month run above the 100% mark.

According to auction data company GG Auction, the average winning bid reached 97.0% of appraised value last month, down four percentage points from 101.0% in July. The ratio had last fallen below 100% in March, when it stood at 99.3%.

The decline was attributed to a slowdown in buying after the announcement of a tax reform proposal earlier in the month. More properties appeared on the market as owners sought tax savings, while lending restrictions remained in place.

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Some large apartments and stand-alone complexes were sold at 60% to 80% of appraised value, lowering the average winning-bid ratio.

Some areas continued to record strong auction demand. The winning-bid ratio reached 115.2% in Jungnang District and 102.8% in Nowon District, where lower-priced apartments make up a larger share of the market.

Lee Ju-hyun, a specialist at GG Auction, said sales of some large apartments and stand-alone complexes at 60% to 80% of appraised value pulled down the average. Demand remained strong for complexes with good living conditions or expectations of reconstruction or remodeling, Lee said. In Gyeonggi Province, the ratio rose to 89.8% from 86.8% the previous month.

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Demand for auctions remains strong in complexes with good living conditions or expectations of reconstruction or remodeling.