Japan’s land prices up for fifth straight year on housing, tourism demand

TOKYO – The average price of land in Japan as at July 1 climbed for the fifth straight year, led by major metropolitan areas with robust housing demand and tourist destinations amid increasing inbound visitors, government data showed on Sept 15.The nationwide overall average logged a 1.5 per cent increase, the same pace as a year earlier, which was the sharpest since the bursting of Japan’s asset price bubble in the early 1990s. By category, commercial land prices rose 2.9 per cent on strong demand for shops and hotels, while residential land prices gained 1 per cent.“As the economy continues to recover, prices are in general maintaining their upward trend,” said an official of the Ministry of Land, Infrastructure, Transport and Tourism.However, while the overall average in the three largest metropolitan areas of Tokyo, Osaka and Nagoya rose 4.4 per cent, growth in the rest of the country was flat at 0.4 per cent, highlighting a widening disparity.The rise in land prices in four major cities outside the three metropolitan areas – Sapporo, Sendai, Hiroshima and Fukuoka – slowed by 1.2 percentage points to 4.1 per cent from a year earlier, lagging the growth rate in the three metropolises for the first time in 14 years.Among them, Sapporo, Sendai and Fukuoka saw buyers refrain from purchases or scaling back as the rapid rise in land prices in recent years was compounded by surging material and labour costs, the ministry said.Meanwhile, by specific location, Furano in Hokkaido marked the sharpest increase for residential land at 32 per cent, while Hakuba in Nagano prefecture logged the steepest rise for commercial land at 35.6 per cent. Both are located in ski resort areas popular among overseas tourists.Asakusa, a popular sightseeing district in Tokyo, was also among the top gainers.Prices for commercial land increased in 34 of Japan’s 47 prefectures, buoyed by demand from more inbound visitors, while residential land prices rose in 20 prefectures.The Meidi-ya Ginza commercial building site in Tokyo’s Ginza shopping district fetched the country’s highest price per sq m of 52.5 million yen (S$431,090), topping the list for the 21st consecutive year.Land prices in Japan slid for decades after the country’s asset price bubble burst in 1992. But they have been on an upward trend in recent years, recovering from the financial crisis triggered by the collapse of Lehman Brothers Holdings in 2008 and the Covid-19 pandemic. KYODO NEWS