Japan land prices rise for second straight year

Japan land prices rise for second straight year

The average price of land in all categories rose 1.6% from a year ago, a second straight year and shows signs of a recovery from the coronaviruses, according to government data.

The national average was up 0.6% from the previous year.

According to data from the Land, Infrastructure, Transport and Tourism Ministry on Wednesday, residential land prices rose by 1.4% nationwide, up 0.9 percentage points from 2022, with the three major metropolitan areas of Tokyo, Osaka and Nagoya climbing 1.7%.

The average land prices in the four regional cities of Fukuoka, Sendai, Hiroshima and Sapporo rose by 8.6%, while other regional areas saw increases for the first time in 28 years, backed by soaring condominium prices.

Nearly all of the about 300 units have been sold in a 32-story condominium that is currently under construction in Shinagawa Ward, Tokyo. Ninety percent of the units in Proud Tower Meguro MARC cost more than 100 million dollars each, and 30% of the buyers are in their 20 s and 30 s in double-income households, according to Nomura Real Estate Development Co.

A married couple who bought a two-bedroom apartment for 110 million said they decided to buy because they were worried that they would not be able to afford property in central Tokyo for a period of 10 years from now. The couple ruled out properties in the suburbs to avoid long commutes.

In a survey conducted by Nomura Real Estate, the regular company employees accounted for 52% of buyers of its condominiums priced at 100 million -- 150 million in the first half of 2022, topping company executives and doctors.

According to a survey conducted by the Real Estate Economic Institute Co., the average price of new condominiums in Tokyo's 23 wards last year was 82.36 million, 40% higher than in 2013.

In Sapporo, residential land prices increased by 15%, which was the only prefectural capital with double-digit growth. There has been a growing influx of people into its urban areas across the prefecture. A 25-story condominium with a maximum unit price over 300 million has almost sold out in the city of Asahikawa.

The price of condominium is likely to remain high for the time because of soaring material costs and land demand. Since such circumstances, couples with children have been looking at smaller properties with an area of about 40 square meters, which real estate agents have traditionally targeted at single-person households.

Commercial land prices increased by 1.8% nationwide, an increase of 1.4 percentage points from a year earlier in the year. Demand for services in the hotel and restaurant sector is expected to grow with the number of domestic and foreign tourists picking up. The trend of downsizing office spaces due to teleworking has slowed.

The highest-valued residential plot in Japan for the sixth consecutive year was in 1 -- 14 Akasaka, Minato Ward, Tokyo, at 5.12 million per square meter, up 2.4% from the previous year.

The highest-valued commercial land for the 17th consecutive year was 4 -- 5, Ginza, Chuo Ward, Tokyo, where the Yamano Music Co. flagship is located. The plot's value is 53.8 million per square meter, up 1.5% year on year.