[Edaily Reporter KIM HYUNG-HWAN ] A unit worth around 8 billion won at “Raemian One Bayley”—considered one of the premier apartment complexes in Banpo, Seoul—has been put up for court auction for the first time in history. Amid the ongoing trend of high interest rates, this is interpreted as a sign that even among buyers of ultra-high-end apartments, some have run out of the financial resilience to hold on.

According to legal circles on the 7th, Auction Division 12 of the Seoul Central District Court will hold an auction on the 10th for a 117-square-meter unit at “Raemian One Bayley” in Banpo-dong, Seocho-gu, Seoul. The appraised value is 8.8 billion won, and the amount of debt secured by the property is approximately 900 million won.

This marks the first time that “Raemian One Bayley,” a flagship property in Banpo, has been put up for auction. It is rare for a high-end apartment worth several billion won to be auctioned off. Last year, an 84-square-meter unit at Acro River Park, with an appraised value of 5.1 billion won, attracted 20 bidders and became a topic of discussion. In the case of One Bailey, not only is it highly sought after by buyers, but the fact that the debt on this specific property amounts to only about 900 million won has led to reactions describing the situation as somewhat unusual.

Industry insiders attribute the appearance of such high-priced properties at auction to the impact of loan regulations and high interest rates. As of the 2nd, fixed-rate mortgage interest rates reached a high of 7.12%. With this trend of high interest rates continuing, the interest repayment burden on so-called “all-in borrowers” has grown, leading to properties being listed on the auction market. Even when sellers try to sell their properties, ongoing loan regulations and a wait-and-see attitude toward high-priced apartments appear to be perpetuating a vicious cycle where no buyers are coming forward.

Some experts warn that if the ongoing regulatory tightening and high interest rates persist, the number of properties entering auction could surge dramatically. On the 30th of last month, President Lee Jae-myung stated on his social media, “We must take note of the significant increase in mortgage delinquencies and properties entering auction,” adding, “I have instructed the preparation of a system to purchase large quantities of homes below a certain threshold for public housing reserves, in anticipation of a potential housing price crash caused by early mass supply, the suppression of speculative demand, and a surge in loan delinquencies and auctions due to high interest rates.”

In fact, properties such as the Olympic Athletes’ Village in Bangi-dong, Songpa-gu (3.04 billion won), Jamsil Els (3.6 billion won), and Hillstate Complex 1 in Samseong-dong (2.91 billion won) have recently appeared on the auction market.

However, experts analyzed that this trend is not significant enough to impact the market. According to Jiji Auction, the number of apartment auctions conducted in Seoul from January to August was 1,213, a 36.2% decrease compared to the same period last year (1,900). As for the auction success rate, it fell slightly to 97% last month compared to the previous month (101%), but it remains high in districts such as Jungnang-gu (115.2%) and Nowon-gu (102.8%), where mid-to-low-priced apartments costing 1.5 billion won or less account for a large share of the market.

Lee Ju-hyun, a senior analyst at Jiji Auction, explained, “There have been loan restrictions in place, and purchases have been driven mainly by those with sufficient cash reserves, so there has been some impact from increases in property taxes and interest rates.” He added, “However, this will not lead to a flood of properties coming onto the market, and this particular listing (at One Bailey) is likely to be a rare case that comes up only once in a while.”