Rising Land Prices in Japan's Regional Areas

Rising Land Prices in Japan's Regional Areas:
Tokyo, Osaka and Nagoya

Land price increase in metropolitan cities

Average land prices in Japan’s regional areas rose for the first time in 31 years, thanks to thriving major cities outside the three largest metropolitan areas, according to a land ministry report released on Sept. 19.

The average land prices across the country also rose for the second year in a row.

As of July 1, the average price for residential, commercial and industrial land outside the areas of Tokyo, Osaka and Nagoya increased by 0.3 percent.

The increase was driven by the four metropolitan areas of Sapporo, Sendai, Hiroshima and Fukuoka, which saw an 8.1 percent increase.

Offering greater career and educational opportunities, these cities experienced rises in land prices in the 4 to 6 percent range even during the COVID-19 pandemic.

Redevelopment projects in recent years have also attracted residents and businesses to the cities.

Another factor is that land prices in the regional areas outside the four cities, which had been declining for 30 years, showed signs of improvement.

Of 38 regional prefectures, 27 recorded a decline in their overall land prices. However, 20 prefectures saw the figures increase or remain unchanged in their capitals.

The rise in land prices in prefectural capitals was partly due to people moving into central city areas, which offer greater transportation links and amenities.

In addition, the government’s initiative to attract semiconductor plants to manufacture next-generation chips has led to a continued surge in land prices around the planned sites in Chitose, Hokkaido, and Kikuyo, Kumamoto Prefecture.

For both residential and commercial land values, about half of the top 10 areas where land prices are rapidly rising are related to the semiconductor sector.

However, these are exceptions as land prices have been declining in most regional areas.

On a national average, prices rose 0.7 percent compared to 0.1 percent in 2022 for residential property. For commercial property, the figure was 1.5 percent compared to 0.5 percent last year.

The Meidi-ya Ginza commercial building site in Tokyo’s Ginza shopping district extended its record as Japan’s most expensive real estate for the 18th consecutive year, with one square meter at the site being valued at 40.1 million yen ($271,000).

Related Articles

General
Information, News
The Tokaido Shinkansen, which connects Tokyo and Shin-Osaka, has discontinued its onboard food cart service due to a shortage of workers and declining sales. The service had been a feature of the line since its inception in 1964. Despite popular offerings like Shinkansen-exclusive ice cream, sales couldn't compete with convenience stores and station shops. Central Japan Railway Co. (JR Tokai) intends to explore alternative service models and innovations to address this issue.
Investors/Business
News
Japan’s housing sector has been flat for years. But if dwellings are plentiful and attainable, why should that be a bad thing? These days, when Japan’s property market makes the headlines at all, it’s usually for the wrong reasons: The millions of homes sitting empty across the country, perhaps, or the notoriously poor investment that buying a house can prove. But look at it from the perspective of housing as a roof over people’s heads rather than a store of a value, and Japan starts to look like a success. Even in these post-Covid times, the country faces no affordability crisis. Rents are stable — one key reason that inflation is so comparatively low — and housing can be found for almost any budget.
General
Information, News
Taiwan Semiconductor Manufacturing Co. announced on Tuesday that it will build a $7 billion plant in Japan's southwestern prefecture of Kumamoto to help meet the global shortage of semiconductors.
General
Information, News
Hakone, a popular hot spring resort in Kanagawa Prefecture, may introduce its first lodging tax and increase the bathing tax due to financial strain from tourism-related costs.