56
D. Kirschke et al.
future. It can be argued that land prices in East Germany would have increased faster
in the past without the former EALG privatization rules.
There are now concerns that the recent BVVG land selling prices are higher than
the non-BVVG land sales, probably for all new Bundesländer and particularly for
Saxony-Anhalt. There is an increasing debate whether the new BVVG privatization
guidelines contribute to the rising land prices in East Germany. The changed land
privatization process with public tender has led to increased market transparency and,
possibly, to a new interest of non-agricultural investors in land by reducing market
entry barriers (Hüttel et al. 2015). In a recent study for Brandenburg, increasing
activities of non-agricultural and non-regional investors on land markets have been
identified (Agra-Europa 2017), but there is no comprehensive overview on such new
developments on agricultural land markets in East Germany so far. Balmann (2015)
argues that the BVVG land activities basically enhance market transparency and
contribute to market efficiency. Hence, the fragmented land market in East Germany
rather reflects “market prices” for BVVG land sales whereas non-BVVG land sales
might be influenced by inadequate information, non-economic interests, or market
power of local big farms. Hence, the change of the BVVG land privatization guidelines has certainly an impact on land markets, but a specific price increasing effect
in recent years can hardly be identified. Generally, Tietz and Forstner (2014) argue
that the rising agricultural land prices in recent years basically reflect market forces
and do not point to a speculative bubble.
It is also true that BVVG land sales mark a considerable share of overall land
sales, e.g. amounting in 2015 to 35% for the East German average and to even 57%
for Mecklenburg-Western Pomerania (own calculation according to BVVG, various
years, and Agra-Europe 2016). The BVVG privatization system is scheduled to end
in 2030.
There is no doubt that land mobility has increased considerably in East Germany
in recent years (Sect. 3.3). However, this is not entirely reflected in official land
statistics. The official figures will rather be lower than real activities on land markets
since shareholder changes in legal entity farms affect land allocation, but not official
statistics. Tietz (2015) estimates that such shareholder deals surpass the statistically
documented land mobility by about 20%. Hence, one may argue that non-agricultural
and non-regional land investors contribute to higher land mobility (Emmann et al.
2015).
Summarizing this chapter the political framework certainly had and will continue
to have an impact on land markets and land price developments. New demands
under the CAP have contributed to make agricultural land scarcer and the REA has
considerably affected land use in various regions. In East Germany, there are some
specialties related to the farm structure and the land privatization process under the
BVVG.
D. Kirschke et al.
future. It can be argued that land prices in East Germany would have increased faster
in the past without the former EALG privatization rules.
There are now concerns that the recent BVVG land selling prices are higher than
the non-BVVG land sales, probably for all new Bundesländer and particularly for
Saxony-Anhalt. There is an increasing debate whether the new BVVG privatization
guidelines contribute to the rising land prices in East Germany. The changed land
privatization process with public tender has led to increased market transparency and,
possibly, to a new interest of non-agricultural investors in land by reducing market
entry barriers (Hüttel et al. 2015). In a recent study for Brandenburg, increasing
activities of non-agricultural and non-regional investors on land markets have been
identified (Agra-Europa 2017), but there is no comprehensive overview on such new
developments on agricultural land markets in East Germany so far. Balmann (2015)
argues that the BVVG land activities basically enhance market transparency and
contribute to market efficiency. Hence, the fragmented land market in East Germany
rather reflects “market prices” for BVVG land sales whereas non-BVVG land sales
might be influenced by inadequate information, non-economic interests, or market
power of local big farms. Hence, the change of the BVVG land privatization guidelines has certainly an impact on land markets, but a specific price increasing effect
in recent years can hardly be identified. Generally, Tietz and Forstner (2014) argue
that the rising agricultural land prices in recent years basically reflect market forces
and do not point to a speculative bubble.
It is also true that BVVG land sales mark a considerable share of overall land
sales, e.g. amounting in 2015 to 35% for the East German average and to even 57%
for Mecklenburg-Western Pomerania (own calculation according to BVVG, various
years, and Agra-Europe 2016). The BVVG privatization system is scheduled to end
in 2030.
There is no doubt that land mobility has increased considerably in East Germany
in recent years (Sect. 3.3). However, this is not entirely reflected in official land
statistics. The official figures will rather be lower than real activities on land markets
since shareholder changes in legal entity farms affect land allocation, but not official
statistics. Tietz (2015) estimates that such shareholder deals surpass the statistically
documented land mobility by about 20%. Hence, one may argue that non-agricultural
and non-regional land investors contribute to higher land mobility (Emmann et al.
2015).
Summarizing this chapter the political framework certainly had and will continue
to have an impact on land markets and land price developments. New demands
under the CAP have contributed to make agricultural land scarcer and the REA has
considerably affected land use in various regions. In East Germany, there are some
specialties related to the farm structure and the land privatization process under the
BVVG.