Japan’s nationwide average land prices rose 1.5% in the year to July 1, according to a government survey reported by Reuters — matching last year’s pace of growth and marking a fifth consecutive annual increase, the strongest run of gains since the aftermath of the early-1990s asset-price bubble. The increase matched last year’s rise, which was itself the largest since a 3.1% gain in 1991, reflecting the survey’s broad measure of residential and commercial land nationwide.
The increase is not evenly spread. The average for the Tokyo, Osaka and Nagoya metropolitan areas climbed 4.4% year-on-year, an acceleration of 0.1 percentage point from the previous year, pointing to continued demand pressure in Japan’s largest urban markets. The effect is sharper still in tourism hotspots: commercial land in Hakuba, a ski-resort town in Nagano Prefecture, jumped 35.6% on the back of inbound-tourism demand, according to the survey.
For property owners and prospective buyers in Japan, the figures point to a housing and commercial-land market still being pulled upward by a mix of urban demand and a tourism boom, five years running. Reuters reported that the Bank of Japan said it sees little sign of overheating in the current trend, but that the land-price survey will be among the factors weighed as the central bank decides how quickly to dial back stimulus and raise interest rates.
References
Reuters – Japanese land prices rise for a fifth year / The Straits Times – Japan’s land prices up for fifth straight year on housing, tourism demand
