Japan’s Ministry of Land, Infrastructure, and Tourism released their annual report of land prices across the country earlier this week to great fanfare on the news that prices had appreciated nationally for the first time since 2008. Urban centers sucked up the majority of these gains, with smaller suburban and rural locales losing value as the country’s aging population reorganizes around major cities, yet certain regional areas are also benefiting from the ongoing tourism boom. The report includes information on residential, commercial, and industrial land, but today, a closer look at the commercial side.
The above chart shows the yearly percentage change in land prices for Japan’s three major metropolises, as well as the average land price for the nation’s regional areas, which have been in a state of constant decline since 1993. That trend continued into this year, but mid-sized cities as well as the three metros experienced enough appreciation to bring the year-on-year percentage change in commercial land prices to 0.9% nationally, the first time the MLIT has reported a positive figure since the global financial crisis. Greater Tokyo, Osaka, and Nagoya have been moving largely in step together since first going positive in 2014, with the Osaka area edging out the other two urban centers at 3.3% compared to Tokyo and Nagoya’s 2.7%.
Ranking the year’s biggest gainers further illustrates the boom in Osaka land:
High traffic commercial districts in Osaka such as Shinsaibashi and Dotonbori experienced an astonishing 40%-plus rise in the span of one year on the massive influx of foreign tourists. More than half of the surveyed sites in the top ten come from central Osaka, while Nagoya and Sapporo also make appearances. Also benefiting from increased tourism is the medium-sized city of Kanazawa in Ishikawa Prefecture, famous for its well preserved relics of Edo culture, which in one case saw the value of its commercial land rise over 30%.
Though not appearing on the list of biggest gainers Tokyo was no slouch this year either, as the ranking of the priciest survey sites in the country shows:
Ginza unsurprisingly maintains its title as the priciest neighborhood in the country, with the land underneath the Yamano Music headquarters receiving an evaluation of over 40,000,000 yen per square meter– an 18.6% rise over the previous year and 70% more than the sites rounding out the top ten. The Marunouchi and Otemachi districts, both in the small stretch of land between Tokyo Station and the Imperial Palace grounds and a couple minutes to Ginza on foot, also make several appearances. The only other neighborhood to appear on the list is the area surrounding Shinjuku Station’s east exit, which is seeing a flurry of activity including the redevelopment of a site next to Studio Alta.
Next week: A look at trends in Japan’s industrial land prices