Land prices in Japan grew by 2.3% in 2023, the highest rate of growth since 2010, according to a National Tax Agency poll. After 2.5% growth in 2022 and a 0.5% increase in 2021, this year's increase in prices was the third in a row. Out of 47 prefectures, 29 saw an increase in land prices, including Tokyo, Hokkaido, and Okinawa. The largest rise, 5.8%, was recorded in Fukuoka Prefecture due to reconstruction and a rebound in tourism. Ginza in Tokyo continues to be the most expensive place in Japan. The study reveals strong demand, supported by a rebound in tourism and a depreciating yen, for both residential and commercial land.
Land prices in Japan rose by 2.3% in 2023, marking the fastest increase since comparable data became available in 2010, according to a National Tax Agency survey. This rise extends the growth seen in previous years, with a 1.5% increase in 2022 and a 0.5% rise in 2021. The increase reflects a recovery bolstered by a rise in tourism following the COVID-19 pandemic.
According to the report, 29 of Japan's 47 prefectures saw an increase in land prices, including important regions like Tokyo, Hokkaido, and Okinawa. Compared to the 25 prefectures where prices increased the year before, this represents an increase. In contrast, there were 16 prefectures in 2023 compared to 20 in 2022 when land prices dropped.
The strongest growth was seen in Fukuoka prefecture, which recorded a 5.8% increase. This rise was driven by solid demand for both residential and commercial land, supported by redevelopment projects that boosted office demand. Additionally, the recovery in tourism led to increased demand for hotels and restaurants in the area.
Plots in Tokyo's Ginza shopping district, which has been the most expensive place in Japan for 39 years running, have maintained their high value due in part to the return of foreign visitors. In 2023, the cost of this plot went up by 3.6% to 44.2 million yen (USD 274,705) per square meter. This was the Ginza plot's second year of price rises in a row.
Japan's tourism sector played a significant role in the land price recovery. The nation welcomed over 3 million visitors for the third consecutive month in May, with the weak yen further boosting inbound tourism. In 2022, Japan received approximately 25 million foreign visitors, a significant recovery from the pandemic-affected years, though still below the record 31.9 million visitors in 2019.
For properties acquired during the year, inheritance and gift taxes are computed using the tax agency's annual land price assessment, which is carried out on January 1. The figures for this year are consistent with a wider pattern of recovery and expansion in Japan's real estate industry, which is being fueled by both local and foreign demand.
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