Average commercial land prices in Japan were almost flat in July, an improvement from eight straight years of decline, thanks partly to robust demand for city hotel and shop construction to meet foreign tourist demand, the government said Tuesday.
Prices across the country were up 0.005 percent on July 1 compared with the same day a year earlier, while strong demand for offices boosted the prices in the nation’s three largest metropolitan regions to a rise of 2.9 percent, data from the Ministry of Land, Infrastructure, Transport and Tourism showed.
But the margin of increase in the Tokyo, Nagoya and Osaka metropolitan regions was smaller than that in Sapporo, Sendai, Hiroshima and Fukuoka, where average commercial land prices rose by a sharp 6.7 percent.
The ministry attributes the trend to low interest rates driven by the Bank of Japan’s negative interest rate policy, which has boosted investment in real estate.
The prices of commercial land in other regional cities fell by 1.5 percent, while residential land prices dropped 1.4 percent.
Across Japan, residential land prices fell an average of 0.8 percent, a decline for the 25th straight year, but the pace slowed slightly on solid demand amid low mortgage rates and due to tax breaks for home buyers, the ministry said.
A bright spot was residential land in the four regional cities — Sapporo, Sendai, Hiroshima and Fukuoka — which rose 2.5 percent in price. Along with the commercial land prices for the cities, residential prices grew for a fourth straight year.
Residential land prices in Tokyo, Nagoya and Osaka edged up 0.4 percent, the same as last year.
Among Japan’s 47 prefectures, Osaka saw the fastest commercial land price rise at 4.7 percent, buoyed partly by demand for hotels to meet rising numbers of overseas visitors. Osaka hosts the Universal Studios Japan theme park and is close to the tourist trap of Kyoto and the city of Kobe.
Okinawa posted the highest growth in residential land prices at 1.9 percent, reflecting increasing numbers of people — including the wealthy — moving there.
Akita Prefecture was the greatest loser, with commercial land falling 3.8 percent and residential prices 3.4 percent.
Both categories of land in Kumamoto Prefecture, which was struck by major earthquakes in April, fell by a little over 1 percent. Residential land in hard-hit Mashiki town was down 9.8 percent.
The Meidi-ya Ginza building in Tokyo’s Ginza shopping district won the crown for the highest estimated land price nationwide for an 11th consecutive year. If the land were to be sold, it would fetch ¥33 million per square meter, surpassing the ¥30 million logged in July 2008 before the global financial crisis.