Japanese land prices continue to rise

TOKYO: Land prices in Japan as of the beginning of this year were 1.6% higher on average than a year before, up for the fifth consecutive year, supported by a rise in development projects and foreign visitors, government data showed yesterday.

However, it is likely the prices as of Jan 1, will experience a downturn if the economy continues to weaken from the fallout from the novel coronavirus.

The data released by the National Tax Agency showed that land prices climbed in 21 of the country’s 47 prefectures, with Okinawa seeing the steepest rise of 10.5%, helped by robust demand for inbound tourism, followed by Tokyo at 5%, and Miyagi and Fukuoka prefectures at 4.8%.

Land prices in Yamagata and Yamaguchi prefectures rose for the first time in 28 and 25 years, respectively, according to the data, which covered about 320,000 sites for calculation in inheritance and gift taxes for 2020.

But Tadashi Matsuda, a chief researcher at the Real Estate Economic Institute, said, “It is certain the situation will worsen even in those areas due to the spread of the coronavirus.”

He said the situation might become more severe than the years following the collapse of Japan’s bubble economy in the early 1990s.

Land prices fell in 26 prefectures, with the margins of decline narrowing in 19, according to the data. Toyama saw a bigger fall than a year before, down 0.3%, while the prices in Hyogo, where they remained flat in the previous survey, decreased 0.1%.

Of the 47 prefectural capitals, prices rose in 38, up five from a year earlier, with a plot on the Kokusai-dori shopping street in Naha, Okinawa, registering the highest increase of 40.8%.

Those in the cities of Aomori, Nagano, Gifu, Tsu, Matsue and Tokushima rose having previously been flat.

Eight remained at the same level, with Mito, Ibaraki Prefecture the only city to experience a downturn.

A plot in Tokyo’s Ginza shopping district, in front of Kyukyodo stationary store, fetched a record 45.92 million yen ($425,280) per square metre, making it the most expensive piece of land in the country for the 35th straight year.

The plot’s record price was renewed for the fourth consecutive year, but it only saw a 0.7% rise from a year before.

Niseko Kogen Hirafusen street in the town of Kutchan in Hokkaido, a popular ski resort for foreign visitors, recorded the sharpest price rise for the sixth consecutive year at 50%.

Land designated as evacuation zones in parts of Fukushima Prefecture following the 2011 nuclear disaster continued to show no value in the data.