Land prices have dropped across Japan for the first time in four years, testifying to the severe effect of the global financial crisis on the domestic real estate market, according to data released Wednesday by the National Tax Agency.
The average price of land per sq. meter along selected thoroughfares fell 5.5 percent, or ¥8,000, from a year earlier to ¥137,000 as of Jan. 1, the agency said.
Average land prices fell in all 47 prefectures. Even in major urban areas centering on Tokyo, Osaka and Nagoya, prices declined after three consecutive years of increase.
“Roadside land prices” assessed at some 370,000 benchmark points across Japan are used by tax authorities to calculate inheritance and gift taxes for each year.
The latest survey results indicate the global financial turmoil, triggered by last autumn’s collapse of major U.S. investment bank Lehman Brothers Holdings Inc., forced overseas investors to withdraw their funds from the real estate market in Japan, analysts said.
The average land price in the Tokyo area fell 6.5 percent to ¥331,000, compared with last year’s rise of 14.7 percent. The Osaka area saw its average price drop 3.4 percent to ¥169,000 against a year-before rise of 7.4 percent, while the price in the Nagoya area fell 6.3 percent to ¥119,000 in comparison with a 10.9 percent increase.
As a symbolic example of plunges in land prices in major urban areas, the price of a lot in front of East Japan Railway Co.’s Ikebukuro Station in Tokyo, which soared 33.3 percent in 2008 due in part to the opening of a new subway line by Tokyo Metro Co., declined 15.9 percent this year.
The average of land prices in regions other than the Tokyo, Osaka and Nagoya areas dropped 3.8 percent to ¥51,000 after leveling off in the previous two years.
Of the 47 prefectures, Miyagi, Tokyo and Aichi witnessed their average prices decline 6 percent to 7 percent following gains of more than 10 percent in 2008.
A lot in front of the Kyukyodo stationery store in Tokyo’s Ginza shopping district remained the most expensive piece of real estate in Japan for the 24th straight year, though its price fell 2.0 percent to ¥31.2 million per sq. meter.
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