Average land prices in Japan rose for the first time since before the epidemic

Average land prices in Japan rose for the first time since before the epidemic

By Kantaro Komiya

TOKYO (Reuters) – An annual survey by the Japanese Land Ministry showed on Tuesday that land prices in Japan rose in the 12 months to July 1 for the first time since before the epidemic, thanks to the easing of COVID-19 control measures.

The data highlighted the continuing damage border controls are inflicting on Japan’s tourism industry, at a time when the government is signaling to reopen its doors again to attract foreign visitors.

Overall property prices in the world’s third-largest economy rose 0.3% on July 1 compared to the previous year, after a 0.4% drop in the year to July 1, 2021, and a 0.6% drop in the twelve months before. That poll. show up.

“The decline last year is largely due to the impact of the epidemic, and this time land prices have recovered from there,” a Land Ministry official said in a media briefing.

The survey showed that residential land prices, which have fallen over the past 31 years, posted a slight 0.1% increase in the 12 months to July 1, after a 0.5% decline the previous year. The advancing age and declining population of Japan led to the long-term decline in the value of residential land.

Commercial property prices rose even faster, by 0.5%, reversing their 0.5% decline in the previous year thanks to a rebound in retail demand as Japan abandoned epidemic controls, according to the survey.

Data from 2016 to 2019 showed commercial land prices rising at accelerating rates, supported by the central bank’s stimulus monetary policy and a pickup in hotel construction to meet the growing needs of foreign tourists.

But strict COVID-19 border controls, which were partially relaxed in June, have effectively prevented tourists from arriving. Only 250 thousand foreigners visited last year, 0.8% compared to 2019.

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With the yen down nearly 20% against the US dollar this year, officials have hinted at a further drastic relaxation of border controls to boost numbers of foreign visitors.

Property prices in some of the popular tourist spots have risen in the 12 months to July 1 thanks to the return of local visitors. A Land Ministry official said areas that relied heavily on foreign tourists, such as downtown Osaka, continued to drop prices.

Tuesday’s data also showed a 1.7% rise in the value of industrial land. This was the fifth year of price growth, buoyed by strong demand for space for online commerce stores.

Among the 21,431 sites surveyed, an industrial district in southwest Kumamoto Prefecture enjoyed the largest increase in land prices, at 31.6%, thanks to the construction of the factory in the neighborhood by Taiwan Semiconductor Manufacturing Co (TSMC).

with partners Sony (NYSE: Group and Denso Corp., TSMC, the world’s largest chip maker, is building its first Japanese factory in Kumamoto.

“There is a wave of semiconductor-related companies and logistics operators setting up their businesses there (in Kumamoto),” the Land Ministry official said, adding that the project has also stimulated residential and commercial property values โ€‹โ€‹in nearby areas.

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