Market Trends

MLIT LOOK Report: Land Values Continue Steady Growth Outside Tokyo

Land prices rose in 86% of locations surveyed by Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in its Q2 2017 LOOK Report, which surveys land price trends for intensively used commercial and residential land in major cities throughout Japan.

Importance of the LOOK Report

The LOOK Report is closely watched as a lagging indicator of land price trends. The MLIT surveys 100 locations throughout the country: 43 in Tokyo, 25 in Osaka, 9 in Nagoya, and 23 in regional cities. Thirty two (32) locations are residential and 68 are commercial.

Steady Upward Trend

The most recent survey covers the second quarter of 2017 (April 1 to July 1, 2017), and as a whole, land prices in Japan are continuing on a gradual upward trend. As in the first quarter of the year, overall, prices rose in the three major metropolitan regions (Tokyo, Osaka, and Nagoya), as well as the major regional cities of Sapporo, Sendai, Kanazawa, and Fukuoka.

In the second quarter, land prices rose in 86 of the 100 locations surveyed, an increase of one compared to the previous term. In 14 locations, prices were flat, and in no locations did prices decrease.

What has been driving growth

As in its first quarter report, the MLIT gave credit to three main factors driving the gradual increase in commercial and residential land pries.

  • Strong conditions in the office market have been pushing down vacancy rates.
  • Continuing progress in large-scale re-development projects.
  • Lodging and consumption demand from inbound tourists remains strong.

These conditions have been supporting investment in shops, offices, and hotels.

High-Growth Locations

The MLIT ranks surveyed sites into several growth categories:

  • Flat (0% growth)
  • 0% to 3% Growth
  • 3% to 6% Growth
  • More than 6% Growth (no locations were given this ranking in the current survey)

In this quarter’s survey, nine locations (versus ten in the previous quarter) were given the next-to-highest ranking (3% to 6% growth) assessment.

Only one residential site Miya no Mori in Sapporo was seen to grow in this range. The other nine were commercial areas: Eki Mae-Dori (Sapporo), Chuo 1-Chome (Sendai), Nagoya Eki-Mae (Nagoya), Taiko-Guchi (Nagoya), Shinsaibashi (Osaka), Namba (Osaka), Hakata Station Area (Fukuoka), and the Shita-Dori Area (Kanazawa City).

Last quarter, the commercial neighborhoods of Shinjuku-San Chome (Shinjuku Ward, Tokyo) and the Kanazawa Station Area in Kanazawa City were ranked in the 3% to 6% growth category, but both areas slipped a notch to 0% to 3% growth.

Residential Land Values Continue Steady Rise — Outside of Tokyo

In the 32 residential locations surveyed nationwide, 22 were assessed as growing, with Miya no Mori in Sapporo being the only site given the 3% to 6% ranking, as mentioned above.

As in the previous quarter’s survey, almost all sites surveyed outside Tokyo 23 Wards were assessed as growing. Ariake in Tokyo’s Koto Ward was the only site surveyed in the 23 Wards that was not evaluated as being flat.

Pease see details for 32 residential blocks surveyed below.

Japan MLIT LOOK Report Q2 2017 Land Value Survey 1 of 2Japan MLIT LOOK Report Q2 2017 Land Value Survey 2 of 2

You may also be interested in: How affordable was it to buy a home in Japan by prefecture in 2016?

Top Photo: Nagoya Eki Mae Station Area

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.