According to the latest quarterly LOOK Report issued by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), land prices at 57% of the surveyed locations saw an increase in the first quarter of 2022. This is a vast improvement from a 28% share seen in the same quarter in 2021 and a 1% share seen in the second quarter of 2020 when the effects of the pandemic began to be known.

16% of locations saw land prices decrease in the first quarter of 2022, compared to 27% of locations in the first quarter of 2021 and 38% of locations in the second quarter of 2020.

Residential land continues to perform strongly as competition remains high for developers seeking to build apartments. For commercial sites, some locations saw land prices fall due to the lingering effects of the pandemic, but the ultra-low interest rate environment has resulted in other locations seeing either flat or a slight improvement in prices.

In Tokyo, the Minami Aoyama district recorded the fifth straight quarter of land price increases, with residential land prices seeing 0 ~ 3% growth. This is a highly-valued brand-name neighborhood close to the boutiques and cafes of Omotesando. With more people spending time working from home, demand from apartment buyers seeking homes in this neighborhood has been strong. Apartment prices are on an upwards trend, with new apartments offered for sale via a lottery system due to high demand. Land for development sites is in short supply and with tight competition. The appeal of this neighborhood to Japan’s wealthy domestic buyers is expected to remain strong and stable, supporting current price growth.

Source: MLIT, June 7, 2022.