500 million ↑ 164% higher than the initial appraisal price
The Seoul auction market is also being reorganized to focus on actual residence due to stricter regulations on multiple homeowners.
High-priced bids are continuing mainly in mid- to low-priced small-sized complexes where reconstruction is favorable. As a result, the successful bid price rate for apartments in Seoul has exceeded 100% for four consecutive months.
According to GG Auction's auction trend report on the 16th, the successful bid price rate for apartments in Seoul in July was 101%, down 0.7 percentage points from the previous month (101.7%). However, it continued to be strong, exceeding 100% for four consecutive months.
If the successful bid price rate exceeds 100%, it means that the bid price of the successful bid is higher than the appraised price. The average number of bidders was 6.1, down 1.1 from the previous month (7.2).
The number of bidders has decreased, but the reason why the successful bid price rate has risen seems to be because a large number of high-priced bids have been made for items under 1.5 billion won. Usually, in an auction market, the number of bidders refers to the demand for investment.
Last month, the Seoul auction market attracted double-digit bidders to mid- to low-priced apartments with good reconstruction and remodeling. The 46㎡ dedicated to Munjeong Siyoung in Munjeong-dong, Songpa-gu, Seoul, was welcomed with a new owner at 1.312 billion won, which is about 500 million won more expensive than the initial appraised price (800 million won). It recorded a winning bid of 164%. The item attracted 40 bidders. Munjeong Siyoung Apartment is currently undergoing remodeling, and the successful bidder can take over the membership status.
In the case of 51㎡ dedicated to Wolgye-Miseong, Miryong, and Samho 3rd round in Nowon-gu, the successful bid price rate was 134.7% (937.99 million won). The initial appraisal price is 696 million won. Twenty-one bidders participated in the auction as the development of the Kwangwoon University station area and the demand for investment were concentrated as a reconstruction complex that could be re-teched at around 1 billion won.
A 50-square-meter item of Shindonga in Yangpyeong-dong, Yeongdeungpo-gu, was also sold at a successful bid price rate of 129.8% (1.181.99 billion won). The initial appraisal price was 910 million won, attracting 15 bidders. The complex will be reconstructed from 563 households to 762 households under the relaxation of the floor area ratio of the semi-industrial area (up to 400%).
The industry and the market believe that the trend of attracting the winning bid price rate of mid- to low-priced small complexes will continue for the time being. Due to the impact of the tax reform, the burden of holding tax and transfer tax on non-resident single-home owners has increased significantly, which could lead to the reorganization of the auction market to focus on end-users and attract demand for body technology to mid- to low-priced apartments with good reconstruction.
Lee Joo-hyun, a senior researcher at Gigi Auction, said, "The overall auction market has shrunk as the demand for winning the bid by multiple homeowners and non-resident single homeowners has decreased."