Land prices in Japan declined by an average of 4.9 percent in the year to Jan. 1, falling for the 10th consecutive year amid the nation’s prolonged economic slump, the Land Ministry said in a report released Thursday.
The report on listed prices of land per square meter across Japan showed prices of residential land dropping an average 4.2 percent last year, almost unchanged from the 4.1 percent fall in 1999.
It also showed the average price of commercial land declined 7.5 percent from Jan. 1, 2000, down from the previous year’s fall of 8 percent and marking the second consecutive annual slowdown in price falls.
The listed land prices, compiled by the Land, Infrastructure and Transport Ministry’s land surveyors, are based on 31,000 samples of land. The prices are used as a benchmark for public and private land transactions as well as for government assessment of inheritance and property taxes.
Kunihisa Ono, administrative vice minister of the Land, Infrastructure and Transport Ministry, said he is worried about the continuing decline.
“The effects of the burst of the bubble economy (in the early 1990s) are still ongoing,” he said, before adding that they would bottom out in the near future.
Land prices are carefully watched as they affect the balance sheets of the many financial institutions and construction companies that invested massively in real estate during the asset-inflated bubble years of the late 1980s.
Residential land prices in three major metropolises — Tokyo, Nagoya and Osaka — and their vicinities dropped 5.6 percent, compared with a 5.9 percent fall the previous year, while commercial land prices declined 8.3 percent, slower than the 9.6 percent recorded a year earlier.
Prices falls slowed in most residential and commercial areas in the Tokyo and Nagoya areas.
Prices rose in 14 residential areas in the Tokyo area, especially downtown districts such as Minato Ward. Prices were unchanged in 45 areas.
In the Osaka area, however, falls in residential land prices accelerated in all but Nara Prefecture. Commercial land prices in the city of Osaka plunged 13.6 percent.
In areas other than Tokyo, Nagoya and Osaka, prices of residential land fell 2.8 percent, 0.5 percentage point more than the previous year’s decline, while commercial land prices dropped 7 percent, the same as in the previous year.
The ministry said land prices in provincial areas will remain weak until concerns about employment and income subside, which may occur when department stores and supermarkets stop closing.
Land in Tokyo’s Ginza district remained the nation’s most expensive for the ninth consecutive year, priced at 13.3 million yen per sq. meter, up 1.5 percent from the previous year.
The Gobancho district in Tokyo’s Chiyoda Ward had the highest priced residential land for the fifth straight year, remaining unchanged at 2.14 million yen per sq. meter.
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