The Most Expensive Piece of Land in Japan in 2016

The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has announced the results of its Standard Land Price (基準地価, kijun chika) survey for 2016.

This survey looks at some 21,675 survey sites nationwide, covering all types of land across the country. Survey sites include both urban areas and  3,500 sites located outside town planning zones with low potential for development and price increases.

Here are the key takeaways:

• Land prices in Japan have declined for 25 years in a row, but the rate of decline is slowing. Year-on-year, prices have dropped 0.6%, versus a year-on-year drop of 0.9% in 2015.

• For the first time in 9 years, commercial land prices have stopped falling. Year-on-year, commercial land prices have stayed flat, versus a drop of 0.5% in 2015. Commercial property prices have been driven by Japan’s tourism boom. According to the Japan National Tourism Agency, 14 million tourists came to Japan in the first seven months of this year, a year-on-year increase of 27%.

• Commercial land prices in Tokyo, Osaka, and Nagoya increased 2.9% in 2016 versus 2.3% in 2015 and 1.7% in 2014.
  • In the Tokyo metro area, commercial land prices rose 2.7% in 2016, up from 2.3% in 2015.
  • In Osaka City, commercial land prices rose 3.7% in 2016, up from 2.5% in 2015.
  • In Nagoya, commercial land prices rose 2.5% in 2016, up from 2.2% in 2015.
  • Commercial land price increases in these urban areas have been driven by government spending on re-development and infrastructure projects, high demand for office space, and monetary easing; in addition to the tourism boom.
• Residential land prices in Tokyo, Osaka, and Nagoya increased 0.4% in 2016 versus 0.4% in 2015 and 0.5% in 2014.
  • In the Tokyo metro area, residential land prices rose 0.5% in 2016, unchanged from 2015’s growth rate.
  • In Osaka City, residential land prices showed no growth, unchanged from 2015’s growth rate of 0.0%
  • In Nagoya, residential land prices rose 0.5%, down from 2015’s growth rate of 0.7%.
  • The MLIT report noted that the low interest environment and home mortgage loan tax-relief measures have helped to firm up residential land prices, especially in Japan’s main urban areas.

Most Expensive Piece of Land in Japan

Based on the Standard Land Price survey, the most expensive piece of land in Japan is the the 2-Chome (Block) of Ginza, specifically Ginza 2-6-7, in Tokyo’s Chuo ward. Land in this neighborhood, home to luxury brands such as Bvlgari, Gucci, and Hermes, is valued at ¥33,000,000 ($325,000) per sqm ($30,225 per sqft), a year-on-year increase of 25.0%.

Where Land Prices Have Increased the Most

The town of Kutchan near the Niseko ski resort in Hokkaido was the biggest gainer in terms of residential land values, rising 27.3% year-on-year. The survey parcel is valued at ¥21,000 ($207) per sqm.

In terms of commercial land, a parcel of land near Nagoya train station had the biggest gain, leaping 32.3% to ¥4,300,000 ($42,000) per sqm. Specifically, the surveyed plot was the Tsubakicho 1-16 block of Nagoya. Appreciation in land prices has been driven by development of the station area in anticipation of the opening of the magnetic-levitation train line to Tokyo in 2027.

2016 Top Gainers: Residential Land

These residential areas were the top year-on-year gainers nationwide.

These residential areas in Tokyo had the highest year-on-year increases in land value.

You may also be interested in: Japan’s Most Expensive Parcel of Land for 30 Years Running (2015)