New government data indicates that the recovery of land prices — which were long depressed after the collapse of the asset-inflated bubble boom in the early 1990s — is finally spreading beyond Japan's big metropolitan areas. Along with the ultra-low interest rate conditions under the Bank of Japan's monetary stimulus programs, steady improvement in the job market under Abenomics policies has been contributing to strong housing demand in convenient locations. Inbound tourism — which continues to expand sharply under the government policy of promoting the sector as a key growth industry — has meanwhile sustained robust demand for hotels and shops that has sparked sharp gains in commercial land prices in many parts of the country.
Hopes are emerging that the upward trend in land prices will be sustained beyond 2020, when Japan hosts the Summer Olympic and Paralympic Games in Tokyo. As far as property prices go, the data as of Jan. 1 suggests that the policies taken so far are bearing fruit.
According to the Land, Infrastructure, Transport and Tourism Ministry, the average commercial land price across the nation gained 1.9 percent from a year ago for the third annual rise in a row, while residential land prices picked up 0.3 percent — an improvement from the 0.02 percent increase last year. Of the 26,000 sites surveyed nationwide, prices rose for 41 percent, outnumbering the 38 percent where prices fell. It was the first time this has happened in 10 years.