What is the ruling on purchasing plots of land through auctions via sealed bids from governmental real estate agencies?

It is permissible to sell plots of land by public auction unless it involves harm or najsh (deceptive bidding). The proof of its permissibility is what was narrated, that the Prophet, peace and blessings be upon him, sold a saddle blanket and a cup by auction.

The Islamic Fiqh Academy issued a resolution permitting auction contracts in sale and lease, whether voluntary or compulsory, provided that the procedures followed do not contradict the provisions of Islamic Sharia. It is permissible to request a guarantee from whoever wishes to participate in the auction and to collect an entry fee that does not exceed the actual value. It is also permissible for an Islamic bank to offer investment projects.

Najsh is forbidden in all its forms, such as increasing the price without the intention of buying, or falsely praising a commodity to entice the buyer, or falsely claiming to have paid a certain price, or using media to mention untrue descriptions or to raise the price for the purpose of deceiving the buyer.