Foreign Tourists’ Favorite Areas Enjoy Land Price Rises

July 3, 2018

Tokyo- Areas popular with foreign tourists in Japan, such as Tokyo, Kyoto and Okinawa Prefecture, have enjoyed strong growth in land prices year on year, a government report showed Monday.

The southernmost prefecture of Okinawa posted growth of 5.0 pct in prices of land facing major streets, according to the National Tax Agency report. It was the biggest growth among the 47 prefectures of Japan, where the nationwide average was 0.7 pct.

The Kokusaidori main street in downtown Naha, the capital of Okinawa, and the Shintoshin new city center district in northern Naha, with its many commercial facilities and office buildings, saw their respective highest land prices rise more than 10 pct.

"I often get inquiries about land that is good for building hotels on," said a licensed real estate appraiser in the prefecture.

Okinawa attracted 9.58 million tourists in fiscal 2017, of whom 2.69 million came from overseas, hitting a record high for the 10th consecutive year.

The prefectural government's tourism policy division hopes to see 12 million tourists in fiscal 2021, backed by an increase in cruise ships that visit the prefecture and low-cost carriers with Okinawa-bound flights.

Foreign visitors were also behind a 4.0 pct rise in roadside land prices in Tokyo. The growth is widely expected to continue until the 2020 Olympic and Paralympic Games.

Foreign tourists may affect land prices in Japan even after the Olympics.

"Many Olympic host countries have seen the number of foreign tourists continue to grow after the games," said Takashi Ishizawa, senior researcher at Mizuho Securities Co. The Olympics makes host countries better known and helps improve public transport and accommodation.

The upward trend in land prices in central Tokyo, including Ginza, may add a special status to the Japanese capital, just as with London and New York, rather than discourage those looking to buy or lease real estate, he said.

Attractive cities that lure tourists create business opportunities and stimulate demand for office space, he observed.

Whether Tokyo and other cities can remain attractive after the 2020 Games will determine the future course of land prices, Ishizawa added. Jiji Press