In March of this year, the MILT (Ministry of Land, Infrastructure, Transport and Tourism) began full scale operation of a "real estate index" aimed at commercial real estate agents. This "Index" is essentially the indexation of house prices nationwide by city and prefecture, calculated by the MILT. With the period starting from April of 2008, average prices are calculated monthly with 2010 levels set as 100 on the index.
Further in the same month, trials started regarding commercial real estate. There have been examples of private Think Tanks calculating similar indexes in the past, but this is the first case of a government led real estate index in Japan.
From the recent announcement, it is clear that in the housing market, condominium prices in particular have been rising since January of 2013. In addition, it is clear that while commercial real estate agent offices and branches have seen a sharp rise in value, factories, and industrial and other commercial areas have been sluggish. While there are several targets for real estate investment, there is no doubt that this index will be useful when selecting from them.
The MILT also announced the number of real estate transactions and overall surface area alongside the index. There is even an English version of the index, making it clear that it is being operated with foreign investors in mind. Perhaps it will be possible for even foreign investors to get a firmer grasp of the Japanese real estate market's condition via this index.
Apr. 25, 2016