Farmland Auction Win Rate Hits 24-Year Low of 38.7%
Only 15 out of every 100 farmland auctions found a new owner, and even those that sold went for less than 40 percent of their appraised value. According to data compiled by auction firm GG Auction on the 8th, last month's nationwide court auctions of farmland posted a success rate of 15.2 percent and a winning-bid ratio of 38.7 percent relative to appraised values — both record lows since statistics began in 2001. A total of 4,536 farmland auctions were held nationwide in October, of which 690 resulted in sales.
The success rate has been on a steady decline. After standing at 17.4 percent in May, when the government launched its comprehensive farmland survey, it fell to 17.2 percent in June, 16.7 percent in July, 16.6 percent in August, 15.5 percent in September, and 15.2 percent in October — five consecutive months of decline. The winning-bid ratio, which had remained in the 40-percent range from November last year through September this year, dropped into the 30-percent range for the first time last month.
Some sales went for less than 10 percent of appraised value. A 4,548-square-meter field in Jeongyang-ri, Yeongwol-eup, Yeongwol County, Gangwon Province, was sold on the 13th of last month for 3.28 million won with a single bidder — just 8.2 percent of its appraised value of 40.09 million won. A 1,293-square-meter field in Gosan-ri, Hojea-myeon, Wonju, Gangwon Province, which went up for auction the previous day, also sold for 8.1 million won, or 11.8 percent of its appraised value of 68.53 million won.
Lee Joo-hyun, an expert committee member at GG Auction, analyzed that weakened buying activity in the farmland sales market has affected the auction market as well. The Ministry of Agriculture, Food and Rural Affairs maintains that tightened farmland regulations following the 2021 scandal involving land speculation by employees of the Korea Land & Housing Corporation (LH) are the main cause of falling prices. According to the ministry, trading volume of general farmland this year rose 2.2 percent from a year earlier while prices fell 4.4 percent.
The government's comprehensive survey, launched in May, classified 2.84 million parcels — 27.0 percent of those subject to basic inspection — as suspected violations of the Farmland Act. The ministry announced it would introduce disposal exemptions for cases unrelated to speculation. A special measures bill covering the disposal of non-speculative farmland was submitted to the National Assembly on the 30th of last month. Under the bill, ongoing disposal proceedings for farmland deemed free of speculative intent would be suspended during the period the law is in effect.
