Majority of surveyed land showing price growth for first time since start of pandemic: 2021 Q4 LOOK Report

Land prices rose in 55 locations out of 100 surveyed by Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in its 2021 Q4 (October 1 to January 1) LOOK Report.

The LOOK report tracks land price trends for intensively used commercial and residential land in major cities throughout Japan.

The 2021 fourth quarter results were a positive sign that land prices are continuing to recover from pandemic lows and the first time since the start of the pandemic that a majority of nationally surveyed land plots were assessed as having positive growth.

The quarterly LOOK report assesses 100 plots of intensively used land across the country, 43 plots in the Tokyo metropolitan region, 25 in the Osaka metropolitan region, 9 in the Nagoya metropolitan region, and 23 in regional areas. Thirty two (32) surveyed plots are residential land and 68 are commercial (retail and office).

The plots are evaluated on whether the value of the land has been rising, falling or staying flat. As can be seen in the chart above, the start of the pandemic in March 2020 caused the assessment of land values to crater in the second and third quarters of 2020.

Land values have steadily climbed since the 2020 Q4 report, with the 2021 Q4 report being the first time that the majority (55) of surveyed plots were seen as having positive growth. However, this is still far below the 2019 Q4 number when business sentiment was riding high on anticipation of tourism and investment effects from the then not-yet-postponed Tokyo 2020 Olympics.

All 55 plots showing price growth were evaluated as growing at less than 3%.

Residential land showing strong recovery, commercial land also on a growth trend

Of 32 residential plots of land surveyed, 30 were evaluated as increasing in value (up from 26 in the 2021 Q2 survey), 6 were evaluated as not growing (flat), up from 2 in the 2021 Q2 survey, and none were evaluated as falling in value. The LOOK report noted that strong condominium sales have provided a tailwind to support residential land values.

For more on record breaking condominium price growth in 2021, please see this article: Average apartment price in Tokyo area hits record high in 2021, exceeding bubble era.

Of 68 commercial land plots surveyed, 25 were seen as increasing in value (up from 14 in the 2021 Q2 survey), 26 were seen as falling in value (up from 24), and 17 as flat in value (down from 30). Although about 38% of plots were seen to be falling in value due to the ongoing effect of the pandemic, retail stores in many districts are on trend to recover profitability. Corporate investors have also been active in conducting transactions in urban centers. These factors have helped to pull the majority of surveyed plots into flat or positive

By region

Of 43 plots surveyed in Tokyo, 23 showed positive growth (up from 17 in the 2021 Q3 survey), 13 were flat (versus 14), and 7 were falling in value (down from 12).

Of 25 plots surveyed in Osaka, 12 were assessed as having positive growth (up from 8 in the previous survey), 8 were flat (up from 6), and 5 were falling in value (down from 11).

Of 9 plots surveyed in Nagoya, 9 showed positive price growth (up from 6), none were flat in value (down from 3), and none were falling in value (same as in the previous survey).

In regional (outside the three major metro areas), 23 plots were surveyed, with 11 showing price growth (up from 9), 7 were flat (same as in the previous survey), and 5 were falling in value (down from 7).


Sources:

2021 Q4 LOOK Report (PDF in Japanese)

2020 Q4 LOOK Report (PDF in Japanese)

2019 Q4 LOOK Report (PDF in Japanese)

Lead image: Kumano city, Mie prefecture at Atashika waterfront via iStock 1126692937


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