Attention is focusing on the background behind President Lee Jae-myung's order to halt all sales of state-owned property. Recent years' data on such sales show a surge in cases sold at 50% of the appraised value, the legal minimum price. Cases of half-price disposals, which used to average one a year, reached 28 last year.
On the 4th, according to materials submitted by the Korea Asset Management Corporation (KAMCO) to the office of Rep. Park Min-gyu of the Democratic Party of Korea, a member of the National Assembly's Strategy and Finance Committee, there was one case each year from 2020 to 2022 where the bid price ratio for state-owned property was 50%.
Here, the bid price ratio is the winning bid as a percentage of the appraised value, and a figure of 50% means the government sold the property at the lowest price allowed. Under the State Property Act, if there are no successful bidders after two failed auctions, from the third auction the price can be lowered to as little as 50% of the initial expected sale price (the appraised value).
Cases of disposing of state-owned property at half price began to increase in 2023. The number, which had been one per year, rose to eight in 2023 and reached 28 in 2024. This year's tally, counted only through July, is 27, roughly in line with last year.
It also appears that many of the disposed properties were priced higher than in the past. From 2020 to 2022, the state-owned property sold with the highest appraised value was around 230 million won. But as disposals began to increase from 2023 to 2025, real estate valued in the multi-billion-won range was sold one after another.
Last year, a site in Nohyeong-dong, Jeju City, Jeju Province (137.3㎡) had an appraised value of 4.2 billion won, but the winning bid was 2.1 billion won. This year, a parcel in Naega-myeon, Ganghwa County, Incheon (2,198㎡), appraised at 1.6 billion won, also actually sold for 800 million won. In addition, parcels in Ilsan-dong, Dong-gu, Ulsan (2,364.6㎡) and Geoje-dong, Yeonje-gu, Busan (243㎡) were appraised at 1.5 billion won and 1 billion won, respectively, but were sold for 750 million won and 500 million won.
There were also cases where the sale price exceeded the legal minimum but was discounted by about 40% from the appraised value. Last year, a site in Amnam-dong, Seo-gu, Busan (25,391.1㎡) had an appraised value of 27.2 billion won but was sold to the private sector for 15.1 billion won. A logistics company in Busan won the bid for the land.
The Ministry of Economy and Finance (MOEF) began actively selling state-owned property under the "2023 Comprehensive Plan for Government Property." At the time, the ministry said it would supply properties with low necessity for state ownership to the private sector and drew up a plan to sell 16 trillion won+α worth of state-owned property over the next five years. It also encouraged private participation by improving systems, such as extending installment periods for purchases of state-owned property.
The Democratic Party of Korea believes the Yoon Suk-yeol administration sold even properties that would not have been disposed of in the past at low prices to make up for tax shortfalls. At a National Policy Committee audit on Oct. 23, Rep. Park Beom-kye said, "Who benefited from selling revenue-generating state-owned property at a bargain price?" and added, "There was a 90 trillion won tax shortfall over two years—wasn't the (sale) done as a way to make up for it?" Taxes in 2023 and 2024 came in 56.4 trillion won and 30.8 trillion won below the initial projections, respectively.
Lee Sang-min, a senior research fellow at the Korea Institute of Public Finance, said, "Selling idle or inefficient assets (when owned by the government rather than the private sector) on the market is not bad in itself." He added, "Because (the Yoon Suk-yeol administration) had said it would sell state-owned property, the sale strategy was exposed to the market," noting, "When the market knows such a strategy, it never tries to pay full price."