Standard land prices across Japan increase for first time since 1991

Yesterday the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) announced the Standard Land Prices for 2018. The average standard land price across Japan increased by 0.1% – the first increase since 1991. This follows a 0.3% drop recorded in 2017.

The driving forces behind the rising land values are a booming tourism industry, low office vacancy rates and a number of large-scale redevelopment projects underway in Japan’s major centers.

Standard Land Prices for commercial land increased by 1.1% nationwide, after a 0.5% increase in 2017. Half of the top 10 ranked survey locations were located in Kyoto City. The ancient capital is benefitting from growing foreign tourist numbers which are supporting the hotel and retail real estate market. Commercial land prices in the city’s central five wards increased by 16.6% in 2018, up from a 13.5% increase in 2017. Residential land prices in the city center increased by 3.6%. Commercial land alongside Shijo-dori Street in Gion increased by 29.2% to 2,170,000 Yen/sqm. The land price has increased by 293% since 2004.

The most expensive survey site in Japan is the Meijiya Ginza Building located in Ginza. The commercial zoned land had a Standard Land Price of 41,900,000 Yen/sqm in 2018, up 7.7% from 2017, although growth has slowed from the 17.9% increase seen last year.

Regional districts saw a 0.6% decrease as declining population and poor transport provides a bleak outlook for their commercial real estate.

Nationwide, the Standard Land Prices for residential land were down 0.3% from last year. In 2017 they had declined by 0.6%. A total of 11 prefectures saw average residential land prices increase, up from 8 prefectures in 2017. Niseko placed in the top 3 spots for residential land price increases nationwide and earned itself top spot for commercial land price increases. A commercial survey site just east of Kutchan Station saw a 45.2% increase in land price in 2018, with the land valued at 45,000 Yen/sqm in 2018. Meanwhile, a residential survey site in Hokkaido’s Bibai City saw the largest decline in Japan with a 10.3% drop in 2018 to 2,600 Yen/sqm. The last time this survey site saw an increase in land prices was in 1985.


In Tokyo’s 23 wards, residential land prices increased by 5.1% in 2018, after a 4.1% increase in 2017. Commercial land prices increased by 8.2%, following a 7.1% increase last year.

Residential land prices in Minato ward increased by 4.9% in 2018 after a 3.9% increase last year. The average land price was 1,507,800 Yen/sqm. In Chiyoda ward, the average residential land price was 2,855,000 Yen/sqm, up 2.7% from last year.

About Standard Land Prices:

Standard Land Prices (kijun-chika) are one of two annually reported land valuations used in Japan, the other being the Government Assessed Land Values (chika-koji). Standard Land Prices are based on a survey date of July 1, while Government Assessed Land Values are based on a January 1 survey date.

The Government Assessed Land Values cover just 1,627 survey sites nationwide with a focus on urban areas in town planning zones, while the Standard Land Prices cover 21,675 survey sites of all types and varieties across Japan, including 3,500 sites located outside of town planning zones with little-to-no development potential and limited opportunities for price increases.

Standard Land Prices tend to follow chika-koji prices, although with less volatility. During the bubble economy, chika-koji prices increased by more than 20% at one point, while the Standard Land Prices increased by around 10%. During the most recent mini-bubble in 2007 and 2008, government assessed land values were in the positive territory, while Standard Land Prices remained negative.

Neither land valuations represent the true market value of a piece of land and should not be used to decide what a property is worth on the open market. However, they are useful as a general guide and to indicate market trends.

MLIT, September 18, 2018.
The Nikkei Shimbun, September 18, 2018.
The Asahi Shimbun, September 18, 2018.

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