In Japan there are several public indexes of land prices. These include the “Official land price”, “Roadside land price”, and “Reference land price” etc. Each is announced once a year based on investigations by particular agencies. The Official land price by the Ministry of Land, Infrastructure, and Transport, the Roadside price by the National Tax Agency or local municipalities, and so on. (Official land price in March, Reference land price in September, and Roadside price in July)
Since these investigations vary in terms of area, borders, and scope, comparing them isn’t particularly meaningful. Further, the government index and the actual trade prices are often very different, meaning they aren’t a very useful reference for real estate deals. Ideally, they can be said to be useful when considering indications such as price, movement, etc.
For the Official land prices announced in March, residential and commercial land prices in rural areas continue to fall, but the rate of decline is shrinking compared to the previous year. Further, there are signs of a recovery such as the average price of commercial land nationwide increasing compared to the previous year, etc.
When looking specifically at Tokyo’s 23 wards, residential land prices have increased year on year by 2.8%, and commercial land by 4.8%. Chou and Chiyoda-wards, Minato, and Shinjuku-wards included, “City centre wards” have seen residential land price increases of 4.6%, and commercial ones of 6.6%, pushing up land prices in all wards.
The Tama area outside of the city wards has seen a decreased rate of growth in residential land prices, meaning the land price disparity has increased even within Tokyo.
One recent unique price variation that stands out among the 23 wards is the rise of commercial land prices due to increased demand for hotel and retail locations, particularly in Ginza and Shinjuku.
Other than Tokyo, other cities such as Osaka and Nagoya are seeing dramatic rises, and this appears to be due to the increased number of foreign visitors. (Continued)
*All percentages are based on the Ministry of Land, Infrastructure, and Transport’s “Official land prices”
May 11, 2016