REAL ESTATE NEWS
By Thomas Shomaker
Japanese land prices have risen for the second consecutive year for all-use, residential and commercial property.
This is the continuation of a trend of land appreciation, which kicked off in Tokyo and several regional cities just over a decade ago, spread to Osaka and Nagoya in recent years and is now being experienced nationwide.
On 20 September, the Ministry of Land, Infrastructure, Transport and Tourism (MILT) released their annual Land Price Survey – covering the period from July 2022 to July 2023 – which showed the rate of land value increase has also expanded.
In regional areas, the average values for all categories and residential land rose for the first time in 31 years, since the collapse of the Japanese asset price bubble (popularly called the “Bubble Economy”) in early 1992.
The four major regional cities of Fukuoka, Hiroshima, Sendai and Sapporo, having started their land appreciation ahead of their surrounding countryside areas, saw, like Tokyo, their 11th consecutive year of rising land values.
While not experienced equally across the country, the trend of land appreciation has firmly established itself outside of the major metropolitan areas and several areas that didn’t see land appreciation saw the value of all-use land turn flat after three decades of decline.
For regional cities, much of the rise is due to foreign investment, attracted by the weak yen and still-low interest rates, and surging tourist traffic after Japan dropped its border restrictions in October of 2022.
To watch this year is what effect China’s property crisis may exert on the Japanese market and whether the Bank of Japan will raise interest rates.
Source:
Ministry of Land, Infrastructure, Transport and Tourism – 20 September 2023
Image:
Redlegsfan21
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