Auction Market Drawn by 30s and 40s... Apartments Under 1.5 Billion Won Sold at Premiums in Widespread Succession

A, a person in their 30s living in a jeonse (lump-sum deposit) rental in Seoul, received a call from their landlord saying they would move in to live there themselves as their lease was nearing expiration.
However, due to the rental crisis, they were unable to find a rental property. 5 billion won or less. Although it is a bit far from where they currently live, they felt relieved knowing that their housing problem had been resolved. As the number of available housing options has decreased this year due to a decline in jeonse and monthly rent listings in Seoul and stricter loan regulations, the number of people turning to auctions is increasing.
5 billion won or less for actual residence are in high demand. The successful bid rate, which serves as an indicator of auction popularity, has also jumped significantly over the past year. 5 billion won (appraised value) or less from the beginning of this year through the 19th have all surpassed those of last year.
5 percentage points. 5 billion won range has risen by more than 10 percentage points. This year, the successful bid rate for apartments in this price range is between 104% and 112%, with no instances falling below 100%.
Considering that the maximum successful bid rate during the same period last year was in the 99% range, this represents a significant increase. Apartments priced at 1 billion won or less have seen a monthly average increase of nearly 10 percentage points. 5 billion won is not particularly high.
7% a year ago. There have been no successful bids this month yet. While eight properties were successfully bid on last June, the market sentiment has changed dramatically over the past year.
During this period, the number of successful bids for apartments exceeding 2 billion won also plummeted by one-third, from 15 to 5. 5 billion won or less have taken off is that real buyers are jumping into the market in large numbers. The explanation is that people unable to find a place to live due to factors such as a decrease in rental listings have chosen to purchase instead.
An official from the auction industry stated, "Recently, inquiries regarding auctions for mid-to-low-priced apartments have increased significantly, centered around the 30s and 40s generation," adding, "There are even cases where people who made money in the stock market move in without loans, adding to their jeonse deposit. " Another reason is that purchasing is easier compared to general sales. Currently, the entire city of Seoul is designated as a land transaction permit zone, and the source of funds must be disclosed to purchase an apartment.
However, in the case of auctions, there is no need to explain the source of funds. Since a financing plan is not submitted, the likelihood of a tax audit is also reduced. Furthermore, in auctions, there is no obligation to reside in the property unless there is a bank loan.
This means that 'gap investment,' which involves buying a property while holding a Jeonse lease, is partially feasible. The auction industry predicts that demand for apartments in the 1 billion won range will continue due to the sustained influx of end-users. An industry insider described the atmosphere, stating, "People with limited financial resources are turning their attention not only to apartments but also to auctions for residential officetels or complex-type officetels," adding that "this is a move for actual residence rather than investment.
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kjh0109@fnnews.com Kwon Jun-ho Reporter