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Residential land prices level out on solid demand in major cities

Kyodo

Residential land prices in 2017 stopped falling for the first time in nine years, supported by solid demand in three major metropolitan areas and other big cities, government data showed Tuesday.

The average nationwide residential land price as of Jan. 1 rose a marginal 0.022 percent from a year earlier, the Ministry of Land, Infrastructure, Transport and Tourism said in an annual survey covering 26,000 locations.

The average price of residential land edged up 0.5 percent in the Tokyo, Osaka and Nagoya metropolitan areas and grew 2.8 percent in the four major regional cities of Sapporo, Sendai, Hiroshima and Fukuoka.

But around 60 percent of locations in regional areas saw a continued year-on-year fall, indicating a widening gap between major regional cities and rural areas.

The rise in prices was attributable to a moderate economic recovery and the government’s policies to expand housing demand, including mortgage tax relief as well as continuing low interest rates under the Bank of Japan’s aggressive monetary easing policy, ministry officials said.

The average commercial land price climbed 1.4 percent, up for the second consecutive year, amid robust demand for hotels in urban areas due to the growing number of foreign tourists and redevelopment projects in some areas.

By prefecture, Okinawa recorded the highest growth in the average residential land price at 3 percent, while Osaka ranked at the top in the commercial growth rate, with a 5 percent rise.

The average land price in Hokkaido, including both residential and commercial, increased 0.2 percent, marking the first rise in 26 years. Hokkaido was aided by rises in commercial land prices near the city of Hakodate, where a gateway for bullet trains from the main island of Honshu opened last March.

The highest land price nationwide was ¥50.50 million per sq. meter at Yamano Music Co.’s head office in Tokyo’s Ginza shopping district.