Residential land prices increase for first time in 31 years

Average Standard Land Price movements across all land uses

Japan’s Standard Land Price for residential land has increased for the first time in 31 years, according to the data released by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) yesterday.

The nationwide average saw a 0.1% increase in 2022. This was the first time land prices have increased since 1991. For commercial land prices, the average price increased by 0.5%, this is an improvement from the 0.3% fall in 2020 and 0.5% fall in 2021.

Across all land uses, the average increased by 0.3%, the first increase in three years.

As the country emerges from the coronavirus pandemic and economic activities resume, there has been growing demand for commercial and residential real estate. 

RESIDENTIAL REAL ESTATE

A total of 14 out of Japan’s 47 prefectures saw average residential land prices increase in 2022, an increase of 7 prefectures from 2021. The three major urban centres around Tokyo, Nagoya and Osaka saw an average increase of 1.0%, with greater Tokyo and Nagoya seeing their land prices grow by a faster rate than last year. Greater Osaka returned to positive growth after a decrease in 2021. Tokyo’s 23 wards saw a 2.2% increase. 

Regional land prices shrank by 0.2%, although this is a slight improvement from a 0.5% decrease in 2021. The four regional cities of Sapporo, Sendai, Hiroshima, and Fukuoka, saw land prices rise by 6.6% due to redevelopment projects. 

COMMERCIAL REAL ESTATE

18 prefectures saw commercial land prices rise, up 6 prefectures from last year. In Tokyo’s 23 wards, land prices increased by 2.2%. In the central five wards of Chiyoda, Chuo, Minato, Shinjuku, and Shibuya, the average price increased by 1.0%. A survey point near Kitasenju Station in Adachi ward saw the highest increase in Tokyo with the land price increasing by 6.2%.

Kyoto’s Gion district saw prices increase by 4.8% after a 2.2% decline last year. Kamakura saw a 4.7% increase after a 0.6% decline in 2021.

In regional Japan, land prices dropped by 0.1%, after a 0.7% decline in 2021.

BIGGEST GAIN

The city with the biggest average increase was Kitahiroshima City located just outside of Sapporo in Hokkaido. Land prices have been influenced by the construction of a new baseball stadium due for completion next year. Residential land prices at one survey point in the city increased by 29.2% to 38,500 Yen/sqm. 

MOST EXPENSIVE

The most expensive survey point for the 17th year in a row is the Meidi-ya Ginza Building in Tokyo where the commercial land price was valued at 39,300,000 Yen/sqm in 2020, down 0.5%, but an improvement from the 3.7% drop seen in 2021.

Sources:
MLIT, September 20, 2022.
The Yomiuri Shimbun, September 20, 2022.
The Asahi Shimbun, September 20, 2022.

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