Seoul apartment auction rate drops 4 percentage points in a month, but outskirts tell a different story

Seoul's apartment auction market has broadly weakened, with the bid-to-appraisal rate dropping 4 percentage points in a single month — yet properties in the city's outer districts continue to sell well above their appraised values. As President Lee Jae-myung recently flagged rising mortgage delinquencies and a growing volume of properties going to auction, attention is turning to whether Seoul's auction market will diverge further along geographic lines.

According to GG Auction's August 2026 auction trend report, Seoul apartments posted a bid-to-appraisal rate of 97.0% last month, down 4.0 percentage points from 101.0% the month before. The award rate — the share of auctioned properties that actually sold — slipped from 38.3% to 37.1%, remaining in the 30-percent range for a third consecutive month. The average number of bidders per property also fell, from 7.2 to 6.1. Some large-unit apartments and standalone complexes sold at 60 to 80 percent of their appraised values, dragging down the overall rate.

The weakness extended nationwide. The number of apartment auctions held across the country last month reached 3,614, up about 26 percent from the same month last year. The national bid-to-appraisal rate fell to 84.7 percent, declining for a third straight month. The rate for all residential properties nationwide — including apartments, row houses and multi-family units — came in at just 69.9 percent, the lowest since January 2005, more than two decades ago.

Earlier, President Lee mentioned "award rates" in an Aug. 30 post on X (formerly Twitter), saying he had directed officials to prepare a system for bulk purchases of homes below a certain threshold for use as public housing, in preparation for a scenario in which housing prices fall sharply.

Within Seoul, however, districts dense with mid-to-low-priced apartments are still seeing properties sell above their appraised values. According to GG Auction, Jungnang-gu recorded a bid-to-appraisal rate of 115.2 percent last month, while Nowon-gu came in at 102.8 percent. Demand is concentrating on mid-to-low-priced apartments with solid living conditions and on complexes where reconstruction or remodeling projects are anticipated.

A 58-square-meter unit at Sanggye Jugong Complex 6 in Sanggye-dong, Nowon-gu, went to auction with an appraised value of 646 million won ($481,000) and drew 12 bidders before selling for 813 million won — a bid-to-appraisal rate of 123 percent. In Sinnae-dong, Jungnang-gu, a 60-square-meter unit at Sinnae Complex 6 attracted 16 bidders and sold for 775.2 million won, or 129 percent of its 602 million won appraised value.

Lower-priced complexes within Han River belt districts also saw above-appraisal results. An 85-square-meter unit at Seongsan World Town Daelim Apartment in Seongsan-dong, Mapo-gu, entered auction at an appraised value of 1.09 billion won and drew three bidders before selling for 1.27 billion won — a bid-to-appraisal rate of 116 percent.

The trend mirrors the broader sales market. According to the Korea Real Estate Board, Seoul apartment sale prices rose 0.22 percent in the week ending Aug. 31 compared with the prior week. Mid-to-low-priced districts led the gains by a wide margin: Seongbuk-gu rose 0.54 percent, Jungnang-gu 0.52 percent, Nowon-gu 0.50 percent, Gangbuk-gu 0.45 percent and Dongdaemun-gu 0.42 percent — all well above the Seoul average. Gangnam-gu, by contrast, fell 0.41 percent and Seocho-gu fell 0.23 percent.

The auction market is showing a similar pattern, with demand clustering in areas where price levels are relatively accessible. That is part of why the overall decline in Seoul's bid-to-appraisal rate alone does not necessarily signal a broad cooling of buyer sentiment across the city.

Historically, auction indicators in Seoul's housing market have tended to deteriorate alongside — rather than ahead of — downturns in the sales market. In 2022, Seoul apartment prices began falling at the end of May, yet the bid-to-appraisal rate for Seoul apartments remained high at 110.0 percent in June of that year, with an award rate of 56.1 percent.

The sharp deterioration in auction indicators came only after the sales market downturn had taken hold. By December of that year, Seoul's apartment bid-to-appraisal rate had fallen to 76.5 percent and the award rate to 17.9 percent. During the 2008 global financial crisis, the Seoul apartment bid-to-appraisal rate similarly dropped from 91.34 percent in June to 69.23 percent in December as the sales market correction deepened.

Because the bid-to-appraisal rate measures the final sale price against the appraised value, it is also affected by the time lag between appraisal and actual bidding. During a price downturn, buyers' price expectations can fall faster than appraisals — which reflect past market prices — causing the bid-to-appraisal rate to drop sharply with a delay.

Experts caution, however, that it would be premature to assume the strength in mid-to-low-priced and outer-district apartments will persist. "If interest rates rise further in the second half of the year, there is a real possibility that the kind of bid-to-appraisal rate declines seen during past housing downturns could repeat themselves," said Lee Ju-hyeon, a senior researcher at GG Auction. "Smaller and mid-sized apartments in outer districts with high loan dependency are currently driving the auction market's upward momentum — but they are also the type most likely to see prices fall first if the market turns down."