The average land price in Japan as of July 1 increased by 1.4% compared to the previous year, marking the third consecutive year of growth, according to the land ministry. This rise reflects the country’s mild economic recovery trend. Residential land prices saw a 0.9% increase due to low interest rates, while commercial land prices grew by 2.4% as a result of an increase in foreign visitors.
Outside of Tokyo, Nagoya, Osaka, and four major regional cities (Sapporo, Sendai, Hiroshima, and Fukuoka), overall land prices showed their first increase in 32 years. In these three metropolitan areas, both residential and commercial land prices rose at a faster rate than the previous year. However, the four major regional cities experienced slower increases in both residential and commercial land prices.
In other areas of Japan, overall land prices grew due to faster increases in commercial land prices and slower decreases in residential land prices.
Among Japan’s 47 prefectures, residential land prices increased in 17 prefectures compared to the previous year while commercial land prices increased in 28 prefectures.
Low mortgage rates continued to support demand for residential plots while resort areas experienced higher demand from individuals looking to relocate or purchase vacation homes.
Commercial land plot prices surged in areas where semiconductor manufacturers were constructing plants. Additionally, tourist spots saw price increases due to a growing number of foreign visitors.
However, some areas were negatively impacted by events such as the Noto Peninsula earthquake on January 1st which led to a decline in their respective land values.
When comparing current overall land prices with those from before the COVID-19 pandemic hit in 2019: approximately 80% of locations within Tokyo’s metropolitan areas posted price increases while about only30% outside these regions did so.
A representative from the Ministry of Land stated that “land prices have recovered from the impact of the pandemic almost everywhere” but noted that outside metropolitan areas there has been a long-term downward trend even before COVID-19 struck.
The most expensive residential site nationwide for six consecutive years was located within Tokyo’s Minato Ward district Akasaka with a price tag per square meter at ¥5.56 million (up from ¥5.24 million). The highest-priced commercial plot remained situated within Ginza district Chuo Ward also within Tokyo for its nineteenth successive year at ¥42.1 million per square meter (up from ¥40.1 million).
