※This content was broadcast on the 'Economy ON' program of Yonhap News TV on Thursday, December 12th at 4 PM. (Featuring: Hong Kyung-pyo, Yonhap Infomax reporter, Hosted by: Lee Min-jae, anchor)

 

[Anchor Lee Min-jae]
This year, the real estate market is still being hit by a cold wave due to the high interest rate trend. In this context, it's reported that apartment auction listings are flooding the market.

[Reporter Hong Kyung-pyo]
Recent data shows a significant increase in apartments entering the auction market. According to the 'October Auction Trend Report' by GG Auction, the number of apartment auctions nationwide reached 3,493, a 19.1% increase from the previous month. This is the highest number in 3 years and 11 months since November 2020. The number of auctions in the Seoul metropolitan area has surged particularly. In Seoul, there were 380 apartment auctions, the highest since April 2015 when there were 401 cases. It's the highest in 9 years.

[Anchor]
What's the main reason for the increase in apartment auctions?

[Reporter]
It's analyzed that a large number of properties have appeared on the market as owners couldn't bear the interest burden due to high interest rates. Although the Bank of Korea is moving towards a change in monetary policy by lowering interest rates, rates remain high. Moreover, apartment prices are not rising well except in some areas, which seems to be affecting the auction market.

In addition, as apartment loan regulations are tightened, the weakening of buying sentiment has intensified, leading to an accumulation of listings. The successful bid rate in Seoul fell by 4.3 percentage points from the previous month to 41.3%, indicating a decrease in people looking for apartment auction properties.

[Anchor]
It seems that buying sentiment has been particularly weak in the outskirts of Seoul.

[Reporter]
This year, only Seoul apartments showed a surge in popularity in specific markets, including Gangnam. In the auction market, properties are piling up in the outskirts of Seoul, in areas like Nowon-gu, Dobong-gu, Gangbuk-gu, known as the 'Nodokang' region. The successful bid rate also showed weakness. Multiple cases of failed bids have pulled down the overall successful bid rate. I visited an apartment site in the Nodokang area. Let's take a look together.

[Anchor]
While the Seoul apartment auction market seems to be struggling overall, Gangnam area apartments are standing out even in the auction market.

[Reporter]
The phrase 'Gangnam invincibility' seems almost meaningless as the Gangnam area is heating up in the auction market. Last month, one out of every two Seoul apartments sold at a price higher than the appraisal value in the auction market was in the Gangnam area. Despite the government's loan regulations, record-breaking transactions continue in the real estate market, centered on Gangnam reconstruction and new complexes, and demand is also concentrating on Gangnam area apartments in the auction market.

In October, a total of 48 apartments in the Seoul auction market were traded at 'successful bid rates of 100% or higher'. This means that 48 units were traded at prices higher than the appraisal value due to a flood of bidders. Among these, 24 apartments were located in the so-called Gangnam 3 districts of Gangnam, Seocho, and Songpa. In other words, half were Gangnam area apartments.

Moreover, 8 out of the top 10 apartments with the highest successful bid rates in Seoul in October were located in the Gangnam area. A 60㎡ apartment in Ilwon-dong, Gangnam-gu, Seoul, attracted 12 bidders and was sold for 1.45221 billion won, about 250 million won higher than the appraisal value. An 83㎡ apartment in the Olympic Athletes' and Reporters' Village in Bangi-dong, Songpa-gu, Seoul, had 19 bidders. These apartments have the common feature of being mentioned as potential reconstruction sites. It can be seen that the demand for Gangnam is supported by both reconstruction complexes and new complexes in the Gangnam area, which are preferred by cash-rich buyers.

[Anchor]
It seems that polarization is progressing even in the auction market. Then, in what direction will the apartment auction market flow in the future?

[Reporter]
First, as the overall real estate market is in a slump, it's expected that auction properties will continue to increase. In a situation where interest rates are not dramatically lowered and real estate regulations remain strong, the number of properties coming out unable to withstand the slump is expected to increase. It's analyzed that auction properties will stagnate as buying sentiment does not revive. However, the preference for 'one smart property' centered on the Gangnam area is expected to continue. I asked Lee Joo-hyun, a senior researcher at GG Auction, about the future outlook for the apartment auction market. Let's meet him together.

(Hong Kyung-pyo, reporter for Yonhap Infomax Broadcasting News Department)

※This content is from the video news covered in the Yonhap News TV Investigation File corner.

kphong@yna.co.kr

(End)

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