Land prices in Japan fell on average for the seventh consecutive year as the pace of decline again picked up amid banks' ongoing efforts to dispose of bad loans, the National Tax Administration Agency reported Wednesday.
According to National Land Agency data, the key average land price as of Jan. 1 fell by 7.1 percent from Jan. 1, 1998, to 158,000 yen per sq. meter, the tax agency said.
The key price, based on land agency data from some 390,000 locations nationwide, is used to calculate inheritance, donation and landholding taxes.
The annual margin of decline had narrowed to 5 percent in 1998 from 8.3 percent in 1997, reflecting a recovery in prices in central Tokyo and some other areas. But the latest results show the nation's economy is still struggling to recover from the bursting of the asset-inflated bubble economy of the late 1980s, analysts said.
Financial institutions are selling off properties held as collateral for problem loans. In addition, debt-ridden companies in other sectors are selling such assets as headquarters buildings and employee welfare facilities to make up for losses and cut costs. The selloffs may also dent demand for condominiums.
For the 14th straight year, the nation's most expensive piece of real estate is a strip of land in front of the Kyukyodo stationary store in Tokyo's Ginza commercial district. The property is worth 11.68 million yen per sq. meter, down 1 percent from 1998 and about one-third of its peak price of 36.5 million yen reached in 1992, the administration said.
Despite the sharp fall over the years, a postcard-size plot in front of the store will set you back 173,000 yen.