Land prices in Tokyo's central Chuo Ward, home to the famous Ginza shopping district, have jumped by 51 percent in four years. In Osaka, they are up by nearly half.
Booming construction of hotels, office buildings, shopping centers and apartments, financed by record lending for real estate by banks, has driven the gains. Now some property investors surveying the market are anticipating price corrections.
Satoshi Horino, president of Mori Trust Asset Management, said he is hearing stories about appraisers calculating returns based not just on purchase price and income, but by adding further price gains, a bold assumption in a country afflicted for years by price declines. He sees this as a contrarian indicator, another sign a reversal is coming.