Japan's Land Values Ascend for the Fourth Consecutive Year
In a significant development for the Japanese real estate market, the Land Ministry recently revealed that the nationwide average land price increased for the fourth consecutive year. The data, released on September 16, 2021, showed that the average price for both residential and commercial districts experienced growth.
The average land price in Japan increased by 1.5% from the previous year, as of July 2021. This marks a notable acceleration from the 1.4% increase seen in the previous year. Among commercial districts, the average price increased by 2.8%, while residential districts saw a 1.0% rise.
The growth in land prices is attributed to a moderate economic recovery in Japan. In residential districts, the increase is due to still low mortgage rates and growing housing demand in resort areas. This trend is particularly evident in resort areas across Japan, where land prices have seen significant growth.
Commercial districts have also witnessed a surge in land prices, with areas visited by foreign tourists and hosting new semiconductor plants showing remarkable increases. Among these, central Tokyo's commercial districts have seen a rise, with foreign investors contributing to the increase. Investments in condominiums in these areas have played a significant role in pushing up land prices.
The growth in land prices was not limited to the Tokyo, Osaka, and Nagoya metropolitan areas or the four major regional cities of Sapporo, Sendai, Hiroshima, and Fukuoka. Even regional areas, excluding certain metropolitan areas and major cities, have seen an end to a 30-year decline in residential land prices. This is a testament to the widespread growth in the Japanese real estate market.
The land price increases in areas hosting new semiconductor plants are a notable trend among commercial districts. This growth is expected to continue as Japan positions itself as a hub for semiconductor manufacturing.
The continued nationwide price growth is a significant development in the Japanese real estate market, signalling a positive trend for the economy as a whole. As we move forward, it will be interesting to see how these trends continue to shape the Japanese real estate landscape.
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