Rosenka land values increase nationwide for first time in 8 years

Tokyo-Kyukyodo-Ginza
At 32,000,000 Yen/sqm (28,900 USD/sq.ft), the land under the Kyukyodo Building in Ginza is the most expensive in Japan.

According to Japan’s National Tax Agency, rosenka land values across Japan in 2016 increased by 0.2% from 2015. This is the first time to see an increase in the nationwide average since pre-global financial crisis in 2008.

Recent monetary easing measures, strong activity in the real estate market in central Tokyo and a surge in the number of foreign tourists are behind the increase in land prices.

Tokyo was in top place with an average increase of 2.9%. Land near the Kyukyodo Building in Ginza remains the most expensive land in Japan for the 31st year in a row. The rosenka land value in 2016 was 32,000,000 Yen/sqm (29,000 USD/sq.ft), up 18.7% from 2015 and has exceeded pre-Lehman Crisis pricing. This land reached a peak of 36,500,000 Yen/sqm in 1992, before dropping to 11,360,000 Yen/sqm in 1997.

Land alongside Omotesando Avenue in Tokyo had a rosenka value of 10,070,000 Yen/sqm in 2016, up 14.2% from 2015.

Miyagi and Fukushima Prefectures saw an increase of 2.5% and 2.3% respectively, due to continued demand for housing following the 2011 Tohoku disaster.

Hiroshima and Kumamoto Prefectures saw land values increase for the first time since the end of the bubble economy in 1992. Due to the timing of the valuations, Kumamoto’s earthquakes in April are not reflected in this year’s rosenka values.

About the Rosenka land values:

Rosenka land valuations are conducted on land fronting major roads. Valuations are done on January 1 each year, with results announced on the following July 1st. The values are used to calculate inheritance and gift tax and typically represent around 80% of the chika-koji (assessed land values), which may then in turn represent around 60 ~ 80% of actual market values.

Sources:
The Mainichi Shimbun, July 1, 2016.
National Tax Agency, July 1, 2016.

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