Japan

Land prices in Japan increased by 2.3% in 2023

PNT Reporter | Last Updated : 5th Apr, 2024

Synopsis

Japan experienced its most significant surge in land prices in 33 years in 2023, signalling a return to pre-pandemic levels and a positive economic trajectory. Nationwide, land prices increased by 2.3%, attributed to economic recovery and a resurgence in foreign visitors. Residential, commercial, and industrial land prices saw notable gains, reflecting solid housing demand, redevelopment projects, and increased tourism. This surge underscores Japan's promising economic outlook, with signs of recovery and sustained growth across various sectors and regions.

In 2023, Japan's land prices experienced their most significant surge in 33 years, marking a return to pre-pandemic levels and signalling a positive economic trajectory after years of stagnation. The rise in land prices, reaching a 2.3% increase nationwide, was attributed to the economic recovery and the resurgence of foreign visitors following the pandemic.

An official from the land ministry noted that the upward trend in land prices has gained strength, indicating a shift away from deflation.

The surge in land prices complements other favourable economic indicators, including rising stocks, robust wage growth, and sustained consumer inflation above 2%, prompting the Bank of Japan to end negative rates last week.

Residential land prices experienced a notable increase of 2.0% for the year, the fastest pace since 1991. Urban areas and regions with excellent transportation infrastructure witnessed solid housing demand, while foreign interest in vacation homes and condominiums in resort areas contributed to price hikes.

Commercial land prices surged by 3.1%, continuing an upward trend for the third consecutive year. Recovery from the pandemic, coupled with redevelopment projects and increased inbound tourism, drove demand in this sector.

Demand for offices and housing also surged in areas hosting semiconductor plants, such as Kikuyo town in Kumamoto prefecture and Chitose city in Hokkaido. These developments were spurred by companies like TSMC and Rapidus, contributing to significant gains in land prices in these regions.

Industrial areas saw a notable increase of 4.2% in land prices, driven by demand for large logistics facilities due to the expansion of the e-commerce market.

In Japan's major metropolitan areas surrounding Tokyo, Osaka, and Nagoya, land prices rose by 3.5%, the fastest rate since 2008, partially due to increased inbound tourism.

Additionally, average land prices in regional cities like Sapporo, Sendai, Hiroshima, and Fukuoka increased by 7.7%, marking the 11th consecutive year of growth, partly due to ongoing development projects.

Overall, the surge in land prices across various sectors and regions reflects a positive economic outlook for Japan, with signs of recovery and sustained growth in key industries. This upward trajectory bodes well for the country's future economic prosperity and development.

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Japan

Land prices in Japan increased by 2.3% in 2023

Synopsis

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