According to a survey conducted by the land ministry, Japan's escalating real estate values are extending beyond its three major metropolitan areas: Tokyo, Osaka, and Nagoya, where the surge initially began. This expansion is attributed to the continuous influx of foreign investment into the market. The regions outside these major cities experiencing property price increases can attribute this growth to three key factors: the rise in foreign tourism, investments in industries like semiconductors, and ongoing redevelopment projects. 

During the first half of the year, property investment in Japan reached 2.14 trillion yen ($14.5 billion), marking a 52% increase compared to the previous year, as reported by the real estate servicer JLL. So far this year, international investors have acquired real estate worth 513 billion yen, which accounts for 60% of the total for all of 2022. 

Nestled in the central mountains of Japan, the city of Takayama features a well-preserved old town area and is currently experiencing a resurgence in real estate values. In the Gifu prefecture city, commercial land values have increased by 2.4% this year after experiencing a similar decline the previous year. Land prices in the city's three main tourist destinations have risen, with one location seeing an almost 10% surge. 

Takayama is attracting investment due to a rise in tourist traffic. The luxury hotel Mercure Hida Takayama opened in December last year, and Hoshino Resorts is planning to open a hot springs inn next year. Takayama isn't the sole location beyond the major metropolitan areas witnessing a resurgence in real estate prices. 

According to data from the land ministry, this year, prices have increased in 44.7% of sites nationwide that are actively monitored by the government, which is double the percentage seen in 2020 when the pandemic had a dampening effect on property values. 

Additionally, investments in industries such as semiconductors are contributing to price hikes in regions outside of metropolitan areas. An illustrative example is the city of Chitose in Hokkaido. In Chitose, sites have claimed the top three spots nationwide in terms of residential value percentage increases. The site near the city's primary railway station recorded the most significant gain, with a leap of more than 30% over the course of a year. 

Meanwhile, in Kikuyo, a town located in Kumamoto prefecture in southwestern Japan, land prices are on the rise due to the construction of a factory by Taiwan Semiconductor Manufacturing Co., the world's largest chip foundry. This has resulted in housing and commercial land values surging by 20% to 30%. The presence of companies involved in the project has also reduced the amount of available land for the factory. 

Infrastructure and urban renewal initiatives have also driven up land prices. For instance, in Fukuoka, the value of commercial land has surged by 11.2%. This increase can be attributed to two significant redevelopment projects that have been launched following the relaxation of zoning regulations. 

Even the three major metropolitan areas continue to experience substantial price hikes. This year, land values have risen in 80.8% of the monitored sites, a significant increase compared to the 33.5% observed in 2020. Residential plots in these urban regions have seen a 2.2% increase this year, compared to just 0.9% in 2019. 

In the Tokyo area, the average price for a new condominium unit reached a historic high of 99.4 million yen in July, as reported by the Real Estate Economic Institute in Tokyo. Looking ahead, the main focus will be on foreign funds seeking to leverage Japan's low interest rates and the weaker yen. However, it remains uncertain how long Japan's low-interest rate environment will persist in the face of global interest rate dynamics. 

In conclusion, Japan's real estate market is undergoing a significant transformation, with property values surging not only in the major metropolitan areas but also in regions beyond. The factors driving this expansion are diverse, ranging from increased foreign tourism to investments in high-tech industries like semiconductors and ongoing redevelopment projects. Cities like Takayama, Chitose, and Kikuyo exemplify how various dynamics are contributing to rising property prices in different parts of the country. As we move forward, the focus will likely remain on foreign funds capitalizing on Japan's low interest rates and the weaker yen. However, the sustainability of this growth will depend on various global economic factors, making the future of Japan's real estate market an intriguing subject to watch.