Market Trends

Japan Land Prices Mark First Rise in 27 Years, Driven by Inbound Tourism

The average price of land in Japan climbed 0.1 % year-on-year, putting an end to 26 straight years of decline.

This was the first year of positive growth since burst of the asset bubble, according to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT)’s Standard Land Price (基準地価, Kijun Chika) survey for 2018. Nationwide, the main growth driver has been an inbound tourism boom fueling frenzied construction of hotels and shops.

The July 1st survey looked 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.

Below are the main takeaways from this year’s survey.

Overview of Residential Land Prices

Nationwide, average residential land prices fell 0.3%, but the rate of decline also fell due to solid housing demand around major train stations.

In the Tokyo, Nagoya and Osaka metro regions, residential land prices increased 0.7% for the fourth consecutive year. The greater Osaka region, where growth has been flat for three years, finally edged up 0.1% this survey year.

In the key four regional cities (Tokyo, Osaka, Nagoya, and Fukuoka), average residential land prices were up an average 3.9 percent.

The report notes that the after effects of the major earthquake that struck northern Osaka Prefecture in June was not reflected in the survey.

Okinawa logged the highest growth (4.0%) in residential land prices, supported by a strong local economy.

Akita Prefecture in northeastern Japan saw the biggest decline in both commercial and residential land prices at 2.6% and 2.4%, respectively.

Most Expensive Piece of Commercial Land

The Meidi-ya Ginza building in Tokyo’s Ginza shopping district posted the highest land price among the surveyed locations in Japan for thirteen consecutive years. The price reached ¥41.9 million per square meter, surpassing the previous high of ¥38.9 million yen in the previous year.

Below are details on the four major metro regions.

Tokyo Capital Region

In the Tokyo capital region, 2,098 sites notched price increases, with an overall growth rate of 1.8% (for both commercial and residential sites), compared to a growth rate of 1.3% last year. Commercial land prices increased 4.0%, which helped to pull up the overall average.

Tokyo Residential

Residential land prices in the Tokyo capital region rose 1.0%, in contrast to much stronger growth in the commercial sector. Specifically, the 23 Wards were up 4.3%. Growth in the northeastern part of Arakawa Ward was especially strong. This is due to improvement in access to the area, which started with the opening of the JR Ueno-Tokyo line in 2015.

A site near Nishi Nippori Station in Arakawa Ward notched the highest growth rate of all residential land sites surveyed in the Tokyo capital region.

Kawasaki City residential land was up 1.7% and Saitama put in similar growth in residential land prices, at 1.6%.

Tokyo Commercial

Looking at commercial land prices in the Tokyo capital region, prices rose 7.2% in the 23 Wards. Areas growing at 5% or greater included: Chiyoda and Chuo Wards in central Tokyo and also northern areas such as Sumida, Itabashi, and Adachi Wards. Cities to the west of central Tokyo, such as Fuchi, Hino, and Inagi also showed strong growth.

Greater Osaka Region


Residential sites surveyed in greater Osaka rose 0.2% year-on-year, the first increase in ten years. Demand for land suitable for condominium development has been strong not only in central Osaka, but also northern Osaka and Sakai City.

In Kyoto prefecture, residential land prices had been falling for ten consecutive years to 2017, but were flat in 2018. Areas in Kyoto prefecture with rapid de-population (such as the northern part of the prefecture) continue to mark declining prices, but this has been offset by demand for land in central Kyoto suitable for lodging to meet inbound tourism demands.

Residential land prices in Hyogo prefecture fell 1.1%, but Kobe City was up 0.5%. Demand for residential land located between Osaka and Kobe has been strong, but demand in the northern part of the prefecture has continued to fall.


Commercial land prices in Kyoto prefecture shot up 7.5% in 2018, a strong increase from 5.7% in 2017. Kyoto prefecture has led the nationwide in commercial land price growth for two straight years, driven by sharply increasing inbound tourist demand for lodging.

In Kyoto City, the price for a plot of commercial land in Higashiyama Ward near Yasaka Shrine leaped 29.2% year-on-year. This was the fastest growing commercial land site in Kyoto in this year’s survey. The supply of commercial land suitable for hotel development is tight in Nakagyo and Higashiyama Wards, but also in Shimogyo Ward (where JR Kyoto Station is located) and Kamigyo Ward where developers are more likely to build share houses.

In Osaka prefecture, commercial land prices rose 5.7% outpacing last year’s growth rate of 5.0%.

Commercial land prices have been especially hot in southern Osaka (in the Namba/Shinsaibashi neighborhood), with inbound tourists pouring in to join throngs of locals in this famous shopping and entertainment district. A commercial building, the Croesus Shinsaibashi, building, notched the highest commercial per meter price in this year’s survey at 16.8 million yen per sqm.

Greater Nagoya Region

Residential land prices in greater Nagoya rose 0.8%, with Nagoya City up 1.6%. Demand for land suitable for investment condominium development as been especially strong.

Outside Nagoya city, Nagakute City and Nisshin City, also showed strong growth, at 3.9% and 2.9%, respectively. Apart from this, demand for single-family homes is strong in Toyota City (where Toyota Motor Company has its headquarters) and the Nishimikawa region where the auto industry is concentrated.

Greater Fukuoka Region

Commercial land prices have continued to grow sharply in the greater Fukuoka region, increasing at 11.1% in 2018, the highest rate of growth since the Lehman shock in 2007, when prices rose 15.2%.

Demand for hotels and commercial facilities is booming not only in central Fukuoka City but also in the eastern part of the city.

In Hakata Ward (where JR Hakata Station is located), there is continuing strong demand for commercial land in the face of a lodging shortage for foreign tourists. Hakata Ward saw a 15.2% increase in the price of commercial land, surpassing last year’s growth rate of 14.4%.

Commercial investment has in turn boosted demand for residential land in Fukuoka, with demand especially high for condominiums in city center neighborhoods. However, in the Fukuoka region, residential land in the station area around Onojo City recorded the highest rate of growth.

In Kita Kyushu residential land prices grew 0.1% in 2018, the first time the city has put in positive growth in 20 years, as yields there are being seen by investors as starting to exceed those in Fukuoka City.

You may also be interested in: Japanese government to make all past real estate sales data public for first time

Sources: The Mainichi Shinbun, Nikkei Shinbun digital editions (September 18, 2018) and the MLIT Kijun Chika survey 2018 (in Japanese)

Top photo: Yasaka Shrine via Wikimedia

Please enable Javascript to send comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.