The disparities in South Korea’s apartment market are becoming increasingly pronounced, with a widening gap between the capital region and other parts of the country, according to a recent report on real estate auctions.
Data released on September 9 by GG Auction, a specialist in foreclosure and public auction information, shows that while Seoul and its surrounding areas are experiencing a surge in apartment auction prices, some provincial regions are seeing significant declines.
The national average auction-to-appraisal ratio for apartments stood at 86.2% in August, a slight decrease of 1.1 percentage points from the previous month. However, this figure masks stark regional differences.
In Seoul, the auction-to-appraisal ratio reached 95.5%, a 1.8 percentage point increase from July and the highest level since July 2022. Notably, 30% of successful auctions in the capital exceeded the appraised value, with even outlying districts like Nowon seeing high-priced sales.
The surrounding Gyeonggi Province also saw improvements, with its ratio climbing 0.7 percentage points to 90.2%, breaking the 90% threshold for the first time since July 2022.
In stark contrast, many provincial areas experienced declining ratios. Gangwon Province recorded a dramatic 15 percentage point drop to 71.7%, its lowest this year. Jeju Island’s ratio fell to 69.5%, a low not seen since July 2020.
Among major metropolitan areas, Gwangju saw its ratio plummet by 10.2 percentage points to 84.2%, while Busan hit a 13-month low at 73.7%, down 4.7 percentage points.
“Seoul’s auction market is benefiting from rising transaction prices and asking prices in the regular market, pushing the auction-to-appraisal ratio to a 25-month high,” said Lee Ju-hyun, an analyst at GG Auction. “However, some provincial areas are experiencing sharp declines, highlighting the extreme regional disparities in the market.”
The report also noted that the number of apartment auctions nationwide exceeded 3,000 for the second consecutive month, totalling 3,168 in August.
