The average price of residential land in Japan rises for the first time in 31 years

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The average price of residential land in Japan rose 0.1 percent from the previous year on July 1, rising for the first time in 31 years as the country’s economy recovers from the coronavirus pandemic, government data showed on Tuesday.

Average commercial and general land prices rose 0.5 percent and 0.3 percent respectively, both recovering for the first time in three years, also on the back of growing demand, supported by low interest rates that have created a favorable lending environment.

“As economic activity normalizes, a trend of recovery in land prices has emerged across the country,” a government official said, citing price increases in the metropolitan areas of Tokyo and Nagoya, as well as in four major regional cities Sapporo, Sendai, Hiroshima and Fukuoka.

The country’s house prices fell steadily after the collapse of the asset-inflated bubble economy in the early 1990s. While the rate of decline gradually slowed from 2010, it accelerated in 2020 with the onset of the pandemic, leading to a 0.5 percent drop in the average price the following year.

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Despite that trend, housing demand has remained solid in urban centers and in areas considered favorable and desirable, driving up land prices in such places.

In 2022, 14 of Japan’s 47 prefectures saw their land prices rise, compared to seven in the previous year, while 32 recorded declines occurred. The average price in Ibaraki prefecture, meanwhile, remained stable.

By region, average land prices for housing in Japan’s largest metropolitan areas, Tokyo, Nagoya and Osaka, rose after an uptick in the western areas.

The average price for regional areas fell 0.2 percent, but the margin of decline was smaller than a 0.7 percent decline a year earlier, with the decline being offset by larger price increases in Sapporo, Sendai, Hiroshima and Fukuoka.

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The 2022 survey covered average prices for all types of land, including commercial, residential and industrial land, based on the value of 21,444 sites across the country, according to the Ministry of Land, Infrastructure, Transport and Tourism.

In terms of average commercial land prices, 18 prefectures saw an increase from six the year before, as recovering private consumption led to increased demand for retail outlets, while demand for apartments and offices was also robust.

Some tourist spots and shopping districts saw land values ​​rise as a result of increased activity due to relaxed pandemic restrictions.

The strongest increase in land prices was recorded in the Kikuyo industrial area, in southwestern Japan’s Kumamoto prefecture, where a 31.6 percent increase was recorded after the world’s largest contract chip maker Taiwan Semiconductor Manufacturing Co. decided to build a new factory there.

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The largest drop of 8.7 percent was seen in residential areas of Koriyama, Fukushima Prefecture, after the area was devastated by a typhoon in 2019.

The Meidi-ya Ginza commercial construction site in Tokyo’s Ginza shopping district took its highest price per square foot at 39.3 million yen ($274,000) for the 17th consecutive year.

The Meidi-ya Ginza commercial building in Tokyo is pictured on September 13, 2022 (TBEN)


Related Coverage:

Japanese land price up 0.5% in pandemic recovery

Land prices in Japan rise again after first decline in 6 years

Land prices continue to fall in Japan during pandemic


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