The average price of land for commercial use outside Japan’s three largest metropolitan areas — Tokyo, Osaka and Nagoya — has risen for the first time since 1991, with an influx of foreign tourists reviving the country’s real estate market, government data showed Thursday.
The price was up 0.3 percent from a year earlier as of July 1.
It was also boosted by redevelopment projects in relatively large cities, according to data released by the Land, Infrastructure, Transport and Tourism Ministry.
The increase, the first since the collapse of the country’s asset-inflated bubble economy in the early 1990s, was driven by four major cities — Sapporo, Sendai, Hiroshima and Fukuoka — which saw strong demand for hotels, shops and offices, as well as the progress of urban redevelopment around train stations.
The average price of commercial land in the four cities grew 10.3 percent from a year earlier, compared with 5.2 percent in the three largest metropolitan areas and the national average of 1.7 percent, which rose for the third consecutive year, according to the data.
Commercial land prices in other cities hosting prefectural government offices exhibited an upward trend, but spillover effects were limited in many depopulated areas.
The average price of residential land outside the three biggest metropolitan areas fell 0.5 percent, continuing the decline seen since 1993.
The average price of residential land dipped 0.1 percent nationally but rose in Tokyo, Osaka and Nagoya by 0.9 percent on the back of solid demand for condominiums and offices.
Among Japan’s 47 prefectures, Okinawa topped the list for both commercial and residential land price increases, at 12.0 percent and 6.3 percent, respectively.
Akita saw the steepest commercial and residential land price declines of 2.1 percent and 2.0 percent.
Among the over 20,000 sites covered by the annual survey, the town of Kutchan, part of the Niseko tourism zone that includes popular ski resorts in Hokkaido, logged the highest price increases for commercial and residential properties, both rising 66.7 percent.
With foreign nationals continuing to purchase vacation homes in Kutchan, the second- and third-ranked spots for the largest margin of increase in residential land prices were located in the town as well.
The steepest falls in land prices were registered in the Mabi district of Kurashiki, Okayama Prefecture, which was devastated by torrential rain and flooding last year.
In western Japan, commercial and residential land prices dropped 15.5 percent and 16.1 percent, respectively. The Meidi-ya Ginza building in Tokyo’s Ginza shopping district registered the highest land price among the surveyed locations for the 14th straight year at ¥43.2 million ($399,000) per square meter, up from the previous high of ¥41.9 million set in 2018.