Land prices in Japan rose 0.4 percent on average as of Jan. 1 from a year earlier, marking the second consecutive year of gain, the National Tax Agency said in its annual report released Monday.
The highest land price in the country was ¥40.32 million per sq. meter for land in front of the famous Kyukyodo stationery store in Tokyo’s Ginza shopping district, up 26.0 percent from last year. The spot remains the most expensive in Japan for the 32nd consecutive year.
The price established a new high water mark, topping the ¥36.5 million recorded at the same location in 1992, soon after the burst of Japan’s asset-inflated bubble economy. The price plunged in the following years, falling to as low as ¥11.36 million in 1997.
Tourism boom and the expectation of improved business conditions ahead of the opening in April of the Ginza Six mega-shopping complex nearby helped inflate the price in the upscale area.
The survey showed the continuing trend of a widening gap in land prices between major cities and rural areas, with land values rising in 13 prefectures, mainly those hosting metropolitan cities, while prices fell in 32 prefectures and remained flat in two others.
Analysts say higher land prices in major cities are partly attributable to solid housing demand and tourism-related factors while areas that saw lower land prices are often rural and with a falling population, exacerbated by diminishing birthrate and a growing proportion of elderly people.
The survey, which compared year-on-year price changes at 325,000 points across the country and is used for inheritance tax calculations, also showed there was no prefecture that posted positive growth in land values this year after posting a fall in the previous 12 months.
By prefecture, the rate of increase was the highest, at 3.7 percent, in the area hit hard by the March 2011 earthquake and tsunami in Miyagi Prefecture, as the opening of a new subway line in Sendai drove real estate development in areas near the new service.
Miyagi was followed by Tokyo and Okinawa, which both saw 3.2 percent gains.
By contrast, land prices fell by the largest degree — 2.7 percent — in Akita.
In Kumamoto, hit by large earthquakes in April 2016, a 0.5 percent fall was registered following a 0.1 percent gain the previous year.
Takeshi Ide, chief analyst at real estate research company Tokyo Kantei Co., said higher land prices in major cities are often linked to an increasing number of foreign tourists, a trend that encourages construction of hotels and development of traffic networks, and that the trend is likely to continue for some time.
“For regional areas that have few resources that attract tourists, it is necessary to set up an attraction to draw in people in and also to enhance the locale’s ability to promote its region,” he said.
The survey also listed the sharpest price rise of 77.1 percent in Niseko Kogen Hirafusen Street, in Kutchan, a ski resort area popular with overseas tourists in Hokkaido. The area saw the steepest price gain for the third consecutive year.