Land prices in Japan as of Jan. 1 rose an average 0.2 percent from a year earlier, marking the first gain since 2008, according to the National Tax Agency’s annual report released Friday.
Investment in the real estate market grew, owing to the inflow of overseas money, the Bank of Japan’s monetary stimulus measures and higher stock prices, while housing markets in major cities benefited from low borrowing costs.
Of the country’s 47 prefectures, land prices rose in 14, up four from a year earlier, according to the survey that covered some 328,000 locations nationwide.
By prefecture, the sharpest rise of 2.9 percent was logged in Tokyo, the host of the 2020 Summer Olympic and Paralympic Games. That was followed by increases of 2.5 percent in Miyagi and 2.3 percent in Fukushima, two prefectures in northeastern Japan where reconstruction continues from the 2011 earthquake and tsunami disaster.
Among the 33 prefectures that recorded declines in land prices, the pace of the falls slowed in 29 prefectures.
“The Tokyo metropolitan area will likely see solid (prices) until the Tokyo Olympics, but it is still unclear whether nationwide land prices will keep rising on average,” said Yuichiro Kawaguchi, a professor of real estate studies at Waseda University’s graduate school.
In worrying signs, he said land prices in some regions continued to decline despite the BOJ’s aggressive monetary easing and the volume of real estate sales appeared to have peaked for now.
The highest land prices in prefectural capitals rose in 25 cities, an increase of four from a year earlier, with Midosuji in Osaka’s Kita Ward recording a 22.1 percent gain. Land prices rose over 10 percent in 10 urban areas, including Tokyo’s 23 wards and Nagoya, as well as Kyoto and Kanazawa, which enjoy booming tourism.
While land prices rose sharply in the downtown areas of major cities, most regional cities recorded price declines, albeit at a slower pace.
The highest land price in the country was ¥32 million (about $312,000) per square meter for land in front of the traditional stationery store Kyukyodo in Tokyo’s upscale Ginza shopping district, up 18.7 percent from last year to remain the most expensive land in Japan for the 31st consecutive year.
The price of that land peaked at ¥36.5 million in 1992, then plummeted to less than one-third that amount at ¥11.36 million in 1997 in the wake of the collapse of Japan’s asset-inflated bubble economy.
The area that saw the sharpest price gain of 50 percent was Niseko Kogen Hirafusen street in Hokkaido’s Kutchan town, a popular ski resort area among overseas tourists.
The agency’s report continued to show no values for land in parts of Fukushima Prefecture designated as evacuation zones following the nuclear disaster at the Fukushima No. 1 power plant.