A Study on the Characteristics and Determinants of Successful Bids on Agricultural Land by Outsiders in Real Estate Auctions

Abstract

The speculation of agricultural land by non-farmers in the recent LH Corporation scandal has raised a huge social issue and caused quite a stir. As the price of agricultural land is rising, it is used as a means of increasing property for a capital gain instead of farming, which is clearly confirmed in the percentage of outsiders purchasing agricultural land. Specifying these issues, this study investigates the characteristics of outsiders making a successful bid in agricultural land auctions and checks factors influencing their successful bids in the procedure of a real estate auction as one of the important ways to acquire land. As for methodology, the investigator examined 1,606 items of agricultural land (fields and paddies) that were auctioned off in court in five major areas around the nation between 2013~2017, dividing them according to outsiders and local people based on the addresses of successful bidders and conducting binary logistic regression analysis. The analysis results demonstrate that the percentage of outsiders in the successful bids of agricultural land was very high in real estate auctions and identified characteristic factors (waterfront areas, stake items, and so on) that had impacts on the successful bids of agricultural land by outsiders.