Last time we reported on the widening disparity of Tokyo land prices, but today we’re talking about another interesting pattern; the noticeable increase in land prices of local cities that are popular tourist destinations for foreigners.
Aside from Tokyo, the popular areas for foreign tourism as Osaka, Kyoto, Hokkaido, Fukuoka, Aichi, etc. For example, Osaka’s six central wards have seen dramatic land price rises of 10.9% compared to last year. In addition, the five central wards of Kyoto have seen rises of 6.3%, Nagoya of 5.5%, and so on. Popular tourist destinations all seem to be seeing big increases.
Another symbol of this is the level of variation of different areas. In This year's official land prices the top 10 places for commercial land price variation were all local cities.
The break down is that Osaka has 6 positions, Nagoya 2, Ishikawa prefecture (famous for the Kenrokuen garden) and Hokkaido’s Sapporo have 1 each. The number one spot is Osaka Chuo ward’s 2-chome area, with a recorded increase of 45.1%. Incidentally, in the previous year’s ranking, Osaka held no places, and half of them were areas within Tokyo.
So far, Japan’s land prices have been greatly affected by the economy, stock prices, and monetary policies, etc,. Of course this year's official land price increases are not unrelated to the economy, but it is hard to explain them using these factors alone.
It truly seems that the increase of foreign visitors to Japan has increased demand for accommodation and retail, and this has led to land price increases. As more and more tourists are expected to flock to Japan, it seems that from now on an important factor is judging land price movements will be their activities.
*All percentages are based on the Ministry of Land, Infrastructure, and Transport’s “Official land prices”
May 13, 2016