Japan Land Prices Fall First Time in Three Years

An average price of land in Japan this year fell 0.6 percent from last year for the first decline in three years as the coronavirus pandemic caused a drop in land demand for commercial operations such as hotels and shops, government data showed. Among 21,519 sites surveyed across the country, 60.1 percent saw their prices fall as of July 1, according to the data released by the Land, Infrastructure, Transport and Tourism Ministry. The survey covered the average prices for all types of land nationwide, including commercial, residential and industrial. Supported by an influx of foreign tourists and increases in commercial property rents and investments in the tourism industry such as those for hotel construction, Japan’s average price of land had been on a recovering trend, rising in 2018 for the first time in 27 years since the collapse of the country’s asset-inflated bubble economy in the early 1990s. If economic conditions show little improvement in the coming months, more areas will see land price falls by the start of next year as the value of real estate reflects future demand, said Shigeo Hirayama, director of a private think tank Urban Research Institute. In Japan’s three largest metropolitan areas — Tokyo, Osaka and Nagoya — the average price of residential land fell 0.3 percent, declining for the first time in seven years, and that of commercial land rose 0.7 percent. In areas outside the three metropolitan areas, the average price of commercial-use land was down 0.6 percent and that of residential land was down 0.9 percent.