Land prices rose in 15 locations out of 100 surveyed by Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in its 2020 Q4 LOOK Report, which tracks land price trends for intensively used commercial and residential land in major cities throughout Japan.
This was a big jump up from only one location that saw rising land prices in the 2020 Q3 LOOK survey. Nationwide, there are still more locations where land values are falling than rising, but residential land prices in some urban districts have recovered from two quarters (April 1 to October 1) of declines brought on by the coronavirus and state-of-emergency and social distancing measures.
In residential areas, 10% of locations surveyed saw declining values and 30% rose (60% were flat). Notably, the following residential land blocks were assessed as having rising land value:
- Miyanomori, Chuo Ward, Sapporo, Hokkaido
- Nishikicho, Aoba Ward, Sendai, Miyagi Prefecture
- Tsuzuki-ku Center Minami, Tsuzuki Ward, Yokohama, Kanagawa prefecture
- Shin Yurigaoka, Asao Ward, Kawasaki, Kanagawa prefecture
- Ozone, Higashi Ward, Nagoya, Aichi prefecture
- Kakuozan, Chikusa Ward, Nagoya, Aichi prefecture
- Rokko, Nada Ward, Kobe, Hyogo prefecture
- Koshienguchi, Nishinomiya, Hyogo prefecture
- Ashiya Station (surrounding area), Ashiya, Hyogo prefecture
The MLIT report pointed out that strong buyer interest in investment properties have driven up condominium sales in locations that are easily accessible to central urban areas, for example Shin Yurigaoka Station in Kawasaki, is about a 30-minute train ride from Shinjuku.
However, there were no residential or commercial sites surveyed in Tokyo, Chiba, Saitama, or Osaka where land prices rose in the last quarter of 2020.
Continuing fallout in commercial areas
Land prices in 38 districts (40% of the total) nationwide fell. This is a drop from the previous survey’s 45 districts, but overall, the Q4 LOOK Report’s results indicate that commercial areas, where office buildings and restaurants are concentrated are continuing to be hit by the government’s call for people to refrain from going out. Looking only at commercial districts, 50% saw declining land values, while 40% remained flat.
Five commercial districts surveyed actually saw values take a further dive, as they were assessed as “declining,” a downgrade from the previous survey, where they were judged to be “flat” in growth. In Tokyo, these were: Nihonbashi and Yaesu (on the east side of Tokyo Station), and the east exit of Shinagawa Station. The remaining two commercial areas where land values pivoted downward were located in Morioka, Iwate prefecture and Koriyama, Fukushima prefecture.
A handful of commercial areas did see an increase in land values, notably the Minato Mirai district of Yokohama and the Chuo 1-Chome block of Sendai. The MLIT’s report noted that the trend in telecommuting caused many people to use shopping areas closer to home, which boosted some commercial areas, like Minato Mirai. Re-development of some areas have also led to rising expectations for future growth and fueled an increase in investment demand.
With the soft lockdown in many cities around Japan, including Tokyo and Osaka throughout January, the report notes that it’s too early to make any calls about how land prices are likely to move in the near future.
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Source: MLIT, 2020 Q4 LOOK Report (PDF in Japanese)
Lead Photo: Nagoya cityscape, iStock