Apartment Auctions Heat up

As apartment prices in Seoul area continue to rise sharply, competition in the auction market is also getting fierce. According to auction information provider M-Tech (www.moneytechi.com), the competition rate in apartment auction block in Seoul reached a record 13.79 to 1 last month.

Songpa-gu saw the fiercest competition at 24.83 to 1, tracked by Youngdeungpo at 19.25 to 1, Nowon at 17.14 to 1, Gwangjin at 13.33 to 1 and Gangdong at 12.17 to 1. In line with the intense competition, prices soared as well. The average sale rate, which compares appraisal prices with sale prices, was up 6.09% to 101.75% from 95.66% in July, taking an upturn for the first time in 5 months since April this year. The rate also topped the 100% level for the first time in 4 months.

Auction sale rates in Incheon and Gyeonggi also took an upswing. Incheon recorded 96.85%, a 3.2% increase over 93.63% in July, while Gyeonggi saw the monthly rate up 1.76% from 89.92% to 91.58%. The auction competition rate was 10.52 to 1 in Incheon and 4.26 to 1 in Gyeonggi.

“The intense competition came in part as Seoul District Court, an auction processor in Gangnam, Seocho and Dongjack, did not organize any auction sale last month, but mostly the price hike in real estate market has rekindled interest in apartment auctions,” said Choi Jung-yoon, manager at M-Tech.

Ki-Jeong Ko koh@donga.com