Prices of commercial and residential land in Japan rose for the first time in eight years in 2015, with growing numbers of foreign tourists pushing up demand for hotels and shops, the government said Tuesday.
Average prices, which also include property for industrial use, were up 0.1 percent in the period, rebounding from a 0.3 percent fall logged the previous year, the Ministry of Land, Infrastructure, Transport and Tourism said in an annual survey of around 25,000 locations nationwide.
The rise was led by commercial land, which climbed 0.9 percent after being flat a year earlier.
Land transactions were brisk in major cities, but more than two-thirds of locations elsewhere saw prices drop.
Japan saw record numbers of foreign visitors in 2015 thanks to a weaker yen and greater efforts to promote tourism. This has resulted in demand for real estate, with investors making the most of low interest rates amid massive monetary easing by the Bank of Japan.
The ministry also reported fewer office vacancies in major cities, boosting the overall profitability of real estate operators.
Nationwide residential land prices also continued to recover due to improving labor conditions and mortgage tax relief. The pace of decline in prices continued to slow for the sixth consecutive year, with the latest figure marking a 0.2 percent fall in the 12-month period to Jan. 1, following a 0.4 percent decline the previous year.
Shinsaibashi-suji shopping street in Osaka logged the sharpest rise in commercial land prices of 45.1 percent, and Kutchan town in Hokkaido, a popular site for cottages near a snow resort, recorded the sharpest increase in residential land prices of 19.7 percent. Both locations are popular with foreign tourists.
Some commercial land in places like Nagoya also saw price growth of more than 30 percent, with a ministry official attributing the rise to “actual demand” for shops and not “speculative moves” aimed at reselling the land.
By prefecture, Osaka posted the highest growth in commercial land prices with a 4.2 percent rise.
But prices struggled to recover in locations other than in the metropolises of Tokyo, Osaka and Nagoya and the major cites of Sapporo, Sendai, Hiroshima and Fukuoka.
Prices fell in 69.8 percent of regions excluding those four large cities, reflecting a persistent gap in economic recovery between major and regional cities.
Meanwhile, the highest land price in Japan was ¥40.1 million per square meter, at Yamano Music Co.’s head office in the upscale Ginza shopping district in central Tokyo. The site has remained in the top spot for 10 years. The latest figure eclipsed the previous high of ¥39 million it marked in January 2008, when land prices were rocketing before the global financial crisis.