Land prices rise 0.5% in commercial districts

September 19, 2017

TOKYO- The average land price in commercial districts in Japan as of July 1 inched up 0.5 percent from a year earlier, mainly reflecting higher demand for hotel and store sites on the back of an increasing number of inbound visitors, a land ministry survey report showed Tuesday.

In residential areas, the average land price fell 0.6 percent, down for the 26th year in a row, although the pace of decline shrank for the eighth straight year as continued low interest rates and tax breaks for housing loan borrowers propped up home purchases, according to the report.

Last year, the average land price almost leveled off in commercial areas while dropping 0.8 percent in residential districts.

The commercial land price rise was "backed by real demand, so the trend is basically favorable," a land ministry official said, stressing that the current situation is different from that in the bubble economy era in the late 1980s to the early 1990s, when land prices rocketed on the back of speculation.

At the same time, however, only metropolitan areas, major local cities and some tourist destinations saw clear signs of uptrends, while many other surveyed areas posted declines in land prices, according to the data. Jiji Press