Land prices rose in 35 locations out of 100 surveyed by Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in its 2021 Q2 (April 1 to July 1) LOOK Report, which tracks land price trends for intensively used commercial and residential land in major cities throughout Japan.
Notably, of 32 residential plots of land surveyed nationally, 24 rose in value (versus 18 in the previous quarter), 8 were flat (versus 14 in the previous quarter), and none declined (same as in the previous quarter). Strong sales of both new and previously owned condominiums, especially, were noted by assessors as a reason for the rise in residential land values.
While the pandemic is still with us…
The 2021 Q2 survey suggests that residential land values have recovered significantly year-on-year but commercial land is still struggling with the fallout from the pandemic, as the border shutdown has essentially closed Japan off from inbound tourism. Inbound tourism and hotel and other infrastructure investment in anticipation of the “Olympic effect” had driven strong growth in commercial land prices for several years leading up to 2020.
In the 2020 Q2 survey (April 1 to July 1, 2020), land values dropped in 45 of 100 locations survey (versus 29 in this year’s Q2 survey).
However, in this year’s Q2 survey, only 11 of 68 commercial plots survey showed an increasing price trend, reflecting the ongoing effects of the government’s suggestions for companies to promote working-from-home and for people to refrain from going out, in addition to the lack of foreign tourists. Of commercial plots surveyed, 28 had flat values (versus 31 in the 2021 Q1 survey) and 29 were assessed as having falling value (versus 27 in the 2021 Q1 survey).
Meanwhile in Tokyo…
As in previous surveys, we are continuing to see some polarization in the growth of land values, where plots in Tokyo have seen greater growth. However, this is less pronounced than in previous years, as the effect of the pandemic on commercial activity has hit nationwide.
In the Tokyo capital region, 14 plots (versus ten in the Q1 survey) showed increasing land values, 18 were flat ( versus 23), and 11 fell in value (versus 10 in the previous survey).
In the Osaka region, 8 plots (versus six in the Q1 survey) showed an increasing trend in value, 6 were flat (versus 8 in the previous survey), and 11 fell in value (same as in the previous survey).
In regional areas, 7 plots (versus 6 in the Q1 survey) showed an increasing trend in value, 9 were flat (versus 11 in the previous survey), and 7 fell in value (versus 6 in the previous survey).
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Source: MLIT, 2021 Q2 (April 1 to July 1, 2021) LOOK Report
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