Average overall land prices in Japan rebounded from a three-year slump, while residential properties gained in value for the first time in 31 years, a land ministry report showed Sept. 20.
The overall average increased year on year by 0.3 percent as of July 1, while residential land prices edged up 0.1 percent, according to the report.
The rises reflect growing demand for homes and stores as economic activities pick up steam following the easing of restrictions related to the novel coronavirus pandemic.
Residential land prices had been steadily sliding since 1992, after the bursting of the asset-inflated economic bubble.
But the latest report found that overall residential land prices were buoyed by the second straight annual increases in the Tokyo and Nagoya metropolitan areas, as well as the first rise in the Osaka area in three years.
One factor behind the increase in residential land prices in the three cities is that a growing number of residents are relocating from the urban centers to the suburbs because they can now telework.
Sales of apartments in large cities are also robust thanks to preferential tax breaks offered to buyers of residential homes.
The average price of commercial land in Japan went up 0.5 percent, compared with last year’s decline of 0.5 percent from 2020. It marked the first increase in three years.
Commercial land prices in Osaka also rose after falling in 2021.
Analysts say businesses are investing more to open shops because personal consumption is now picking up.
Demand for office space is also on the recovery track.
Crowds to popular tourist sites have been slowly returning since the government started to lift virus-related curbs.
Commercial land prices in Tokyo’s Asakusa district rose 4.3 percent on expectations that inbound travelers will return to the levels of the pre-pandemic days.
In Kyoto’s Gion district, commercial land prices surged by 4.8 percent, the biggest increase in the nation.
A luxury hotel operated by Hoshino Resorts Inc. opened in the district in November. The hotel manager said business is good, and rooms were nearly fully booked on a recent weekend.
Commercial land prices near JR Kamakura Station in Kanagawa Prefecture south of Tokyo registered a rise of 4.7 percent.
Last week, many souvenir shops in the neighborhood, a popular tourist destination, were filled with students on school trips and young people.
Hotels and shops have opened up around the station, while vacant offices in commercial buildings are now occupied, according to a local business association.
The Meidi-ya Ginza commercial building site in Tokyo’s Ginza shopping district extended its record as Japan’s most expensive real estate for the 17th straight year.
One square meter at the site was worth 39.3 million yen ($273,000), a decline of 0.5 percent from last year.
The price is expected to rise again after Japan fully reopens to international tourists.
The average price of industrial land across the nation increased by 1.7 percent, due in part to expanding demand for distribution warehouses needed for the rising popularity of online shopping.
In particular, industrial land prices near highway interchanges have surged.
Kikuyo town in Kumamoto Prefecture logged the nation’s largest overall increase in land prices, at 31.6 percent. The town is expected to be home to a factory operated by Taiwan Semiconductor Manufacturing Co., a global chip maker.
The land ministry’s report also showed that gaps in overall land prices are growing between urban centers and the countryside.
The Tokyo, Nagoya and Osaka metropolitan areas as well as the cities of Sapporo, Sendai, Hiroshima and Fukuoka posted rises in residential and commercial property prices.
These prices dropped in the rest of the nation.
