Land Price in Japan 2017
Standard land Price in 2017 for Tokyo
On September 19th, the Ministry of Land, Infrastructure, Transport, and Tourism, announced the standard land prices for designated areas nationwide. On the same day, the Tokyo Metropolitan Government also announced the land prices for Tokyo. The standard land price (*later explained in more detail) is calculated as the price of land per 1 meter squared. Each selected point is examined each year from July 1st.
The average increase in price for land (for all usage) in Tokyo is up +3.0% from last year. This price has been increasing consecutively for the past 5 years, with this year seeing an increase of 0.5 points higher than the increase of previous year (2016.) The 4.9% average increase in commercial areas is mostly based on a significant increase in the areas of recently completed large-scale redevelopment, such as in Ginza and Yaesu. There is also a continuous increase in the price of areas attracting foreign visitors.
The average inflation in Tokyo is +4.9%. That is 0.8% higher than the previous year’s increase of inflation. The average inflation in the 23 wards of Tokyo is +5.9% which is also 1.0%higher than the previous year’s (2016) 4.9% increase from the year before (2015.)
The highest price increase has been marked at 21.8% in the area of 6-chome 8-3, Ginza, Chuo-ku. The top 3 inflation rankings are occupied by areas in Ginza with luxury shops. The average increase of Chuo-ku has also recorded an increase of 8.0% which is the 2nd highest (following 8.6% increase in Shibuya) in the 23 wards of Tokyo. 5 wards in Central Tokyo (Chiyoda, Chuo, Minato, Shinjuku, and Shibuya) have all recorded more than a 6% increase. The reasons behind such an increase include large-scale redevelopment completed in the Ginza and Yaesu areas in Chuo-ku, on-going area redevelopment for the opening of a new station in the Takanawa area in Minato-ku, and active foreign tourist areas having continuous new hotel openings in Shinjuku-ku.
The highest price point is that of the Meijiya Ginza Building at 2-6-7, Ginza in Chuo-ku, which had an increase in price from the previous year. The price, 38,900,000Yen per square meter (33,000,000Yen in 2016) is more than the peak price it achieved during the bubble economy period (38,000,000Yen) and it has broken its highest record after 26 years.
The average price increase in Tokyo is +1.8% which is a 0.3% increase from the previous year.
Significant changes in the results of this year's survey are that 3 central Tokyo wards (Chiyoda, Chuo, and Minato) have dropped down from the Top 10 ranking of average inflation in Tokyo. It shows that the land price in Central Tokyo has almost hit the ceiling and that its inflation is slowing down while the areas on outskirts of Tokyo, with convenient transportation access, have shown significant increases in inflation.
The average standard land prices for residential areas in Tokyo have been increasing for 5 consecutive years, while also showing variation in the increase rate in the various areas.
The average inflation in all wards have shown a large increase of 3.3%, up from 2.7% in the previous year. The highest inflation has been shown as; 5.3% in Arakawa-ku(3.2% in 2016), followed by 5.1% in Bunkyo-ku, and 5.0% in Chiyoda-ku and Meguro-ku showing a significant change in the inflation ranking. In Chiyoda-ku, marked as having the highest inflation in Tokyo in 2016, has dropped 5.0% from the previous year’s increase. A similar decrease has been shown in Chuo-ku and Minato-ku. As a result only 2 points of land in Chiyoda-ku, among 3 central Tokyo wards, have stayed in the Top 10 in the inflation ranking. Private business people observe that the land price in these 3 central Tokyo wards has become so high that a property there is hard to sell for residential purposes. It was also observed that the land price in recent years was pushed up due to the inflation in Central Tokyo, but it is now going to be led by the inflation in the outskirts.
Real estate business professionals observe that commercial areas will continue this inflation trend going into the 2020 Olympic Games. One Major reason is due to the fact that many new spaces for offices are planned to be built from 2018 to 2020, in time for the Olympic Games. Adding to this is the recent situation with the Japanese economy in regards to employment being relatively good as well as the influence of the land prices that are leading the real estate market to stay positive for the time being. On the other hand, residential areas are observed differently due to the fact that the number of new construction of condominium apartments has dropped 5.1% when compared to the previous year’s (2016. ) The price of condominium apartments has soared, in the outskirts of Tokyo and applicants have come to hesitate to buy such properties. It is observed that the price of condos has almost hit the ceiling and it will soon be seeing an adjustment in prices.
Do you still have questions about purchasing property in Japan? Send us an e-mail. We would love to hear from you.
Are you ready to start looking at a premium selection of properties around Japan? Take a look at our property list.