A survey of land prices by the land and infrastructure ministry made public March 23 shows that the global recession has caused a general decline in demand for land throughout Japan. As of Jan. 1, commercial land prices fell by an average 4.7 percent and residential land prices by an average 3.2 percent from a year before — the first drop in three years.
Conspicuously, no land price rise was reported in Tokyo, Osaka and Nagoya. Land prices rose only at 21 of some 24,000 reference spots — all in rural regions and the lowest number since 1970. Land prices leveled off at 701 spots.
In Tokyo, Osaka and Nagoya, commercial land prices fell by an average 5.4 percent — the first drop in four years — and residential land prices fell by an average 3.5 percent — the first drop in three years.
While land prices in residential areas in metropolitan Tokyo rose by more than 10 percent in the previous survey, they dropped by more than 8 percent this time. Land prices in commercial areas in central Tokyo fell by 8.8 percent this time, in a sharp contrast to a 20.4 percent rise the previous time. These areas are clearly hit by contraction of land investment caused by the credit crunch and a decrease in demand for office spaces and condominiums.
The 10 biggest land price falls in commercial areas occurred at nine spots in Nagoya and one spot in Tokyo, with one such a spot in Sakae, Naka Ward, Nagoya, suffering the worst, a 28.4 percent plunge — evidence that the poor business performance of Toyota Motor Corp. is battering Nagoya.
Commercial and residential land prices in rural regions declined by an average 4.2 percent and 2.8 percent, respectively — a decrease for 17 consecutive years. Commercial and residential land prices in Sapporo fell for the first time in four years. Fukuoka and Sendai saw their commercial land prices plunge by an average 9.6 percent — the largest drop among major cities.
The overall trend points to the bad shape of local economies. The central government and local governments need to take urgent measures to turn this situation around, including the implementation of land development plans that will attract investment, leading to an increase in tourism, jobs and population.
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