Japan Residential Land Price Changes: An Overview

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 residential 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 unabated into 2016, although the rate of depreciation lessened, while the Osaka area saw only a slight uptick in valuation this year. Things looked brighter in the Tokyo and Nagoya metros, which gained 0.6% and 0.8% respectively. Interestingly, the Nagoya area has depreciated at a lower rate and appreciated at a higher one than Tokyo since the global financial crisis, a feat likely attributable to the concentration of steady employers related to the Toyota Group located in greater Nagoya.

In raw value terms, however, Tokyo unsurprisingly dominates:


Out of all the sites surveyed nationally by the Ministry, the top ten most expensive locations are exclusively in Tokyo’s Chiyoda and Minato wards. At nearly 3.5 million yen per square meter, the top spot goes to the land beneath the Palais Royal Rokubancho in Chiyoda Ward, though several locations similarly close to the Imperial Palace also place highly. Akasaka also features twice, with spots near Tokyo Midtown and the historic Hotel Okura, as does the southern Azabu area near Hiroo and Azabu Juban stations, while Minami Aoyama in the Omotesando area rounds out the list. In contrast to the 0.6% increase in value recorded in greater Tokyo as a whole, more than half of these locations posted gains of over 9%.

The ranking of survey sites by greatest rate of appreciation tells yet another story:


With a 19.7% increase over the previous year, Kutchan, close to the increasingly popular Niseko ski region and a stop on the future Tokyo-Sapporo bullet train line, heads a list dominated by Hokkaido. The city of Sapporo boasts more than half of the top ten, while parts of Fukushima also enjoyed a resurgence five years after the earthquake that decimated the region. Tokyo’s Minami Azabu makes an appearance here as well, illustrating the enduring potential for gains within the highly developed metropolis.

Tomorrow: A look at trends in Japan’s commercial land prices


“2016 Land Price Public Announcement [Japanese],” Ministry of Land, Infrastructure, and Transport, March 22 2016