Land Prices for 2016 Published
On March 22, the Ministry of Land, Infrastructure, Transport and Tourism released the publicly announced land prices for 2016.
Commercial sites are up 0.9% (0.0% last year) with increased hotel demand and store sales due to growth in the number of foreign visitors to Japan. Residential sites are down 0.2% (-0.4% last year), a smaller margin of decrease than last year. The average change for all uses was +0.1% (-0.3%), the first increase in eight years.
The highest land price was Yamano Music’s flagship store in Ginza at 40.1 million yen per m2, a higher level than during the bubble period.
REITs have drawn attention since the Bank of Japan’s announcement introducing negative interest rates on January 29 produced relatively high cap rates, bringing the REIT index to the high level of around 1900.
On the other hand, land prices in some rural areas have continued to decline over the past 20 years since the bubble burst, polarizing the results.
According to the aggregate preliminary population figures of the 2015 national census announced by the Ministry of Internal Affairs and Communications’ Statistics Bureau, Japan’s population is down 947,000 from the previous census (2010), up in eight prefectures including Tokyo and Okinawa but down in 39.
Considering the impact of population change on land supply and demand, this land price polarization is likely to persist.