TOKYO – The average price of land in Japan fell for the first time in six years due to declining demand for urban commercial land spurred by the novel coronavirus pandemic, the government said Tuesday.
Land in all categories, including residential and industrial, fell 0.5 percent from a year earlier as of Jan. 1., compared with a 1.4 percent rise a year earlier.
All-category land prices in the three largest metropolitan areas of Tokyo, Osaka and Nagoya slipped 0.7 percent from the previous year, while rural land prices dipped 0.3 percent. The land ministry said the effects of the pandemic on land prices were “relatively small” in rural areas.
Of Japan’s 47 prefectures, 39 saw commercial land prices decline, while residential land prices dropped in 38 prefectures, according to the annual government survey covering some 26,000 locations.
A recovery was seen in land prices in the second half of 2020 when the spread of the virus in Japan subsided. But a full-scale recovery is unlikely in the near future as Tokyo and some other areas were under a second pandemic-necessitated state of emergency from early January to Sunday.
Commercial land prices nationwide fell 0.8 percent for the first decline in seven years as demand suffered with hotels and stores in tourist destinations seeing profits plunge as people refrained from going out.
The three major metropolitan areas were hit harder, with a 1.3 percent drop in commercial land prices, while rural areas saw a 0.5 percent dip.
Eight out of the 10 largest declines nationwide in individual pieces of commercial land were logged in Osaka’s Chuo district, led by a 28.0 percent plunge at one site in the Dotombori district, a popular tourist spot known for its huge neon signs and nightlife.
Although rural areas saw the first decline in average commercial land prices in four years, some populous districts saw rises and there were no significant changes in price trends in locations that were already declining steadily due to their decreasing populations.
The big regional cities of Sapporo, Sendai, Hiroshima and Fukuoka, meanwhile, logged a 3.1 percent rise in commercial land prices, supported by redevelopment projects.
Residential land prices across the country dropped 0.4 percent, falling for the first time in five years as people avoided purchasing lots at expensive locations amid deteriorating employment conditions.
They fell 0.6 percent in the three largest metropolitan areas, although locations near convenient transportation hubs rose.
Regional residential land prices decreased 0.3 percent, while those in some prefectural capitals increased. Sapporo, Sendai, Hiroshima and Fukuoka saw a 2.7 percent rise supported by firm demand for land within walking distance of train stations.
Meanwhile, a residential land lot in the city of Hitoyoshi, Kumamoto Prefecture, which was battered by torrential rains last July, saw the biggest decline of 14.6 percent across Japan.
Industrial land prices in the country rose 0.8 percent buoyed by increasing demand for logistics facilities required to service the boom in online shopping.
By site, the town of Kutchan on the northernmost island of Hokkaido, a popular ski resort, led the nation in both commercial and residential land price jumps.
The main branch of Yamano Music Co. in Tokyo’s Ginza shopping district logged the highest land price among surveyed locations across the country for the 15th straight year at 53.6 million yen ($490,000) per square meter, down 4.1 million yen from the previous year.