Japan Commercial Land Prices Rise for First Time in 10 years
Niseko area leads national residential price increases reflecting strong demand from foreign investors.
Commercial land prices in Japan rose for the first time in 10 years this year as a boom in tourism boosted demand for new hotels and retail outlets, a government survey showed on Tuesday.
The average price of commercial land increased 0.5 percent in the year to July 1 after steadying in the prior year, according to the Land Ministry’s broadest survey of nationwide land price trends.
Other recent government surveys have also shown gains in land rates, providing welcome news for a sector dogged by deflation since Japan’s asset bubble burst in the early 1990s.
The survey showed residential and overall land prices were still down for a 26th straight year, falling 0.6 percent and 0.3 percent, respectively, but the pace of the declines slowed.
“The momentum for recovery is continuing,” said Takeo Murakami, director of the ministry’s land price publication office, ahead of the release of the survey. “The latest rise in land prices is supported by actual demand.”
The recovery was led by cities outside the capital Tokyo, with Kyoto, Osaka and Aichi prefectures accounting for the 10 biggest increases.
The biggest price rise for commercial land was at a location near Fushimi Inari Shrine, a popular tourist destination in Kyoto, up 29.6 percent at 350,000 yen ($3,190) per square metre.
In residential prices, a spot in Hokkaido’s Niseko resort led gains with an increase of 28.6 percent to 27,000 yen per sq m, led by demand for holiday homes from foreigners, according to the ministry.
The number of foreign visitors to Japan hit a record 24 million last year, according to the Japan National Tourism Organization, and the government is targeting 40 million by 2020.
The latest survey covers more depopulated locations, making the results more conservative than in the March survey, which showed a rise in overall prices last year.