Land prices close to bottoming out in Japan

The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) announced the ‘koji-chika’ assessed land values on March 21. These prices are current as of January 1 2013. Residential and commercial land prices fell for the fifth continuous year, although the fall in values was smaller than the last year in Tokyo, Osaka and Nagoya, signalling a possible bottoming out of real estate prices.

Nationwide, residential land prices dropped 1.6% (they fell 2.3% in 2012) and commercial land prices were down by 2.1% (they fell 3.1% in 2012). The rate of decline in commercial land prices had shrunk from 2012 in every prefecture.

Residential Land ValuesCommercial Land Values
2009201020112012201320092010201120122013
Nationwide-3.2%-4.2%-2.7%-2.3%-1.6%-4.7%-6.1%-3.8%-3.1%-2.1%
3 Major Cities-3.5%-4.5%-1.8%-1.3%-0.6%-5.4%-7.1%-2.5%-1.6%-0.5%
Tokyo-4.4%-4.9%-1.7%-1.6%-0.7%-6.1%-7.3%-2.5%-1.9%-0.5%
Osaka-2.0%-4.8%-2.4%-1.3%-0.9%-3.3%-7.4%-3.6%-1.7%-0.5%
Nagoya-2.8%-2.5%-0.6%-0.4%0%-5.9%-6.1%-1.2%-0.8%-0.3%
Other areas-2.8%-3.8%-3.6%-3.3%-2.5%-4.2%-5.3%-4.8%-4.3%-3.3%

Land around the Kawasaki and Musashikosugi Stations in Kanagawa Prefecture saw commercial land prices rise by as much as 10% in 2013 due to redevelopment around the station.

Of the 26,000 survey points nationwide, 2,008 saw an increase in land values compared to just 546 locations in 2012. Of these locations, 70% were in Tokyo, Osaka and Nagoya.

Residential land values in Japan’s three major cities (greater Tokyo, Nagoya and Osaka) fell by 0.6%, compared to a 1.3% drop in 2012, while commercial land values dropped by 0.5% compared to 1.6% in 2012. A total of 11.4% of the residential land survey points saw an increase in values compared to 4% in 2012. 12.9% of commercial land survey points saw an increase in 2013, compared to 3.1% in 2012.

Tokyo’s Minato-ku saw residential land values rise by 0.1%. Meguro, Chuo, Chiyoda and Shinagawa-ku all saw residential land values remain steady.

Of all the prefectures and administrative regions across Japan, Miyagi recorded the highest growth nationwide in residential land values with an increase of 1.4%. There was also a location in Ishinomaki City which recorded a 23.6% rise in residential land values. It should be mentioned that this was in a part of the city that was not affected by the tsunami and lots were subdivided by the council for displaced residents seeking higher ground.

In contrast, the Shikoku and San’in regions in West Japan saw land values continue their steep drop as they face a shrinking population and economic decline.

The valuations were carried out at the beginning of 2013, and were too soon to have been affected by Prime Minister Abe’s policies.

Areas with the highest increase in residential land values:

  1. +23.6%. 1-3-3 Shirasagidai, Sue, Ishinomaki City, Miyagi Prefecture
  2. +15.0%. Otsuchi, Shimohei District, Iwate Prefecture
  3. +14.3%. Machiminamiichi, Hirobuchi, Ishonomaki City, Miyagi Prefecture
  4. +13.5%. 1-14-3 Shinei, Ishinomaki City, Miyagi Prefecture
  5. +12.2%. 3-17-12 Shiohama, Ichikawa City, Chiba Prefecture

Areas with the highest increase in commercial land values:

  1. +11.9%. Omiyacho, Saiwai-ku, Kawasaki City, Kanagawa Prefecture
  2. +10.5%. Shinmarukomachi, Nakahara-ku, Kawasaki City, Kanagawa Prefecture
  3. +9.9%. Horikawacho, Saiwai-ku, Kawasaki City, Kanagawa Prefecture
  4. +9.9%. Kosugimachi, Nakahara-ku, Kawasaki City, Kanagawa Prefecture
  5. +9.0%. Asakusa 1 Chome, Taito-ku, Tokyo

Areas with the largest drop in residential land values:

The most expensive residential land in Japan:

  1. Rokubancho 6, Chiyoda-ku, Tokyo – 2,780,000 Yen/sqm (0% change from 2012)
  2. 1-14-11 Akasaka, Minato-ku, Tokyo – 2,440,000 Yen/sqm (0% change)
  3. Sanbancho 6, Chiyoda-ku, Tokyo – 2,150,000 Yen/sqm (0% change)
  4. Ichibancho 16, Chiyoda-ku, Tokyo – 2,110,000 Yen/sqm (0% change)
  5. 2-3-25 Kudankita, Chiyoda-ku, Tokyo – 2,010,000 Yen/sqm (0% change)
  6. 2-4-13 Hirakawacho, Chiyoda-ku, Tokyo – 1,860,000 Yen/sqm (0% change)
  7. 4-9 Minamiazabu, Minato-ku, Tokyo (Park Mansion Minamiazabu) – 1,800,000 Yen/sqm
  8. 2-3-24 Motoazabu, Minato-ku, Tokyo – 1,710,000 Yen/sqm (+0.6%)
  9. 4-20-4 Minamiaoyama, Minato-ku, Tokyo – 1,630,000 Yen/sqm (+0.6%)
  10. 6-19-23 Akasaka, Minato-ku, Tokyo – 1,610,000 Yen/sqm (0% change)

The most expensive commercial land in Japan:

  1. Marunouchi Building, Marunouchi, Chiyoda-ku, Tokyo – 27,000,000 Yen/sqm (0% change)
  2. Yamano Music Ginza Store, Ginza, Chuo-ku, Tokyo – 27,000,000 Yen/sqm (0% change)
  3. Ginza Sony Building, Ginza, Chuo-ku, Tokyo – 23,900,000 Yen/sqm (0% change)
  4. Shin-Otemachi Building, Otemachi, Chiyoda-ku – 20,800,000 Yen/sqm (0% change)
  5. Meidi-ya Ginza Building, Ginza, Chuo-ku, Tokyo – 19,700,000 Yen/sqm (0% change)

Sources:
The Asahi Shimbun, March 21, 2013.
The Nikkei Shimbun, March 21, 2013.
MLIT: http://tochi.mlit.go.jp/kakaku/chikakouji-kakaku