Land prices in Japan bounce back in 2021
Japan’s land prices rebounded in 2021 from the previous year’s decline, the government said yesterday, showing signs of recovery in the country’s property market battered by rounds of coronavirus curbs and border controls against overseas tourists.
The rise, however, remains far more modest than in other major economies such as the United States, where real estate prices have been among factors driving up consumer inflation.
Japanese land values’ tame rebound will likely shore up the central bank’s commitment to keep ultra-easy monetary policy in place to support a tepid economic recovery.
Average land prices were up 0.5% in the year to Jan 1, according to the National Tax Agency’s survey of 317,000 locations across Japan to calculate inheritance and gift taxes on properties.
That marked a rebound from a pandemic-driven 0.5% decline in 2020, which was the first fall in six years as office and service-sector demand slumped.
“All in all, the impact of Covid-19 was gradually waning and land prices recovered from the year before,” a tax agency official told a media briefing, citing a March Land Ministry survey.
The recovery was led by densely-populated cities — with average land prices in 20 of the country’s 47 prefectures including Tokyo, Osaka and Aichi — rising. In 2020, only seven prefectures saw land prices increase.
The most expensive location in the 2021 survey, an area facing Tokyo’s lavish Ginza shopping street, was priced at 42.24 million yen ($309,156) per square metre.
The price, however, fell for a second year, due to the lack of foreign tourists in Tokyo.
After two years of strict border controls to fight Covid-19 infections, Japan began gradually reopening to tourists from June 10, although arrivals remain far smaller than the pre-pandemic peak of 2019, when nearly 32 million overseas travellers visited the nation.