Japanese land prices up for 3rd year, returns to pre-pandemic levels

The average price of land in Japan rose for the third consecutive year, returning to pre-pandemic levels on the back of the recovering economy and an increase in foreign visitors, government data showed Tuesday.

Land prices in all categories nationwide climbed 2.3 percent from a year earlier as of Jan. 1, compared with a 1.6 percent increase the previous year, according to the Ministry of Land, Infrastructure, Transport and Tourism.

Prices for residential-use land grew 2.0 percent on average, while commercial-use land prices rose by 3.1 percent.

In regional areas excluding the four major cities of Sapporo, Sendai, Hiroshima and Fukuoka, the ratio of places experiencing rising prices exceeded those seeing falling prices for the first time in 32 years, the data covering a total of 26,000 locations showed.

"The upward trend in prices has been strengthening on the back of a moderate economic recovery," a ministry official said. "(Prices) returned to a level prior to the coronavirus pandemic on a nationwide scale, excluding some regional areas."

Prices rose in 65 percent of the locations covered in both the latest and the previous year's surveys, the data showed.

In regional areas excluding the four major regional cities, prices climbed for 41 percent of them, lifted by solid demand for good-access housing and a recovery in demand for stores, backed by an increasing number of visitors to Japan.

On the other hand, prices dropped in 40 percent of the surveyed areas, with a shrinking and graying population among the causes, the annual ministry survey showed.

An assessment of six locations in Fukushima Prefecture has been suspended due to the effects of the 2011 nuclear accident at the Fukushima Daiichi nuclear power plant triggered by an enormous earthquake and tsunami.

Additionally, the impact of a powerful earthquake that struck the Noto Peninsula and surrounding areas in central Japan on New Year's Day is not reflected in the latest survey results.

Residential land prices in the three largest metropolitan areas of Tokyo, Osaka and Nagoya grew 2.8 percent, while prices rose 7.0 percent in the four big regional cities and 0.6 percent in regional areas other than these cities.

As for commercial land, prices increased 5.2 percent in the three largest metropolitan areas, while they shot up 9.2 percent in the four major regional cities, creeping up 0.6 percent in regional areas excluding the four cities, with significant recovery seen in tourist spots and downtown districts as economic activity returned following the pandemic.

Furano in Hokkaido, northern Japan, saw the largest increase in residential land prices at 27.9 percent on the back of brisk land demand for vacation homes among foreigners.

As for commercial land, the town of Ozu in Kumamoto Prefecture, southwestern Japan, saw the biggest jump in prices at 33.2 percent, reflecting robust demand for the area where the world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co. opened its first plant in Japan in the neighboring town of Kikuyo.

By location, the land price of the main store of Yamano Music Co. in Tokyo's Ginza shopping district was the highest among surveyed locations across Japan for the 18th straight year at 55.70 million yen ($368,000) per square meter.

© Kyodo News