Japan land prices up 0.5% in pandemic rebound

Japan’s average land price as of January 1 was up 0.5% from a year earlier, the National Tax Agency said on Friday, rebounding from a slump in 2021 as the country recovered from the coronavirus pandemic.

While 20 of the country’s 47 prefectures saw increases, 13 more than in 2021, prices continued to decline in others, particularly tourist and commercial areas hit by lower inbound travel.

Photo taken on June 23, 2022 shows Japan’s most expensive land in front of the Kyukyodo paper mill in Tokyo’s Ginza shopping district. (Kyodo)

The price of roadside land on 1 January 2021 was down 0.5% on average from the previous year, largely due to the disappearance of foreign visitors amid tighter border controls to stem the spread of COVID-19.

This year, land prices on the northern main island of Hokkaido have risen 4.0%, the highest among the 47 prefectures, helped by the redevelopment of the capital Sapporo.

Fukuoka and Miyazaki prefectures in southwestern Japan recorded increases of 3.6% and 2.9%, respectively, with strong demand in the former for office buildings.

Tokyo as well as Aichi, Osaka and Hiroshima prefectures have also seen land prices rebound.

In contrast, 27 prefectures recorded price declines, the largest in Wakayama at 1.3%, although many contractions were smaller than the previous year.

Meanwhile, 15 prefectural capitals saw land prices rise, with prime locations in Chiba City and Sapporo rising 5.1% and 4.8% respectively, boosted by ongoing or planned redevelopment projects in proximity.

Sixteen prefectural capitals recorded lower land prices, affected by lower numbers of incoming travelers and residents, although the total figure fell by six from a year earlier. Land prices remained at the same level in sixteen prefecture capitals.

The biggest price drop for a prefectural capital was 5.8 percent at the Sannomiya Center Gai shopping street in Kobe, Hyogo Prefecture, which is generally popular with tourists.

Meanwhile, Japan’s most expensive land for the 37th year was in front of the Kyukyodo paper mill in Tokyo’s Ginza shopping district.

It was valued at 42.24 million yen ($311,000) per square meter, down 1.1% from a year earlier, but the drop was well below the 7% decline in government data for 2021.

As in previous years, no values ​​were assigned for land in areas designated as evacuation zones in Fukushima Prefecture following the 2011 nuclear disaster, due to difficulties in assessing them.

The tax agency’s annual survey of prices per square meter of land fronting main roads as of 1 January is used to calculate inheritance and gift tax. It is based on land price data compiled by the Ministry of Lands, Infrastructure, Transport and Tourism and reflects land transactions.

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