Japan's land prices rise for a fifth straight year, led by big cities and ski resorts

The average price of land in Japan as of July 1 climbed for the fifth straight year, according to government data reported by Kyodo News. The nationwide overall average logged a 1.5 percent increase, the same pace as a year earlier, which the report describes as the sharpest since the burst of Japan's asset price bubble in the early 1990s. By category, commercial land prices rose 2.9 percent on strong demand for shops and hotels, while residential land prices gained 1.0 percent. A Ministry of Land, Infrastructure, Transport and Tourism official said that as the economy continues to recover, prices are in general maintaining their upward trend.

The national figure hides a sharp split. The overall average in the three largest metropolitan areas of Tokyo, Osaka and Nagoya rose 4.4 percent, while growth in the rest of the country was flat at 0.4 percent. The rise in land prices in four major cities outside those areas -- Sapporo, Sendai, Hiroshima and Fukuoka -- slowed by 1.2 percentage points to 4.1 percent from a year earlier, lagging the growth rate in the three metropolises for the first time in 14 years. Among them, Sapporo, Sendai and Fukuoka saw buyers refrain from purchases or scale back, as rapid price rises in recent years were compounded by surging material and labor costs.

The steepest individual increases were in resort areas popular among overseas tourists. Furano in Hokkaido marked the sharpest rise for residential land at 32.0 percent, while Hakuba in Nagano Prefecture logged the steepest rise for commercial land at 35.6 percent. Asakusa, a popular sightseeing district in Tokyo, was also among the top gainers. Commercial land prices increased in 34 of Japan's 47 prefectures, buoyed by demand from more inbound visitors, while residential land prices rose in 20. The Meidi-ya Ginza commercial building site in Tokyo's Ginza shopping district fetched the country's highest price per square meter of 52.5 million yen, topping the list for the 21st consecutive year.

For readers planning a trip or working with Japan, the practical signal is geographic rather than national. The districts where land values are climbing fastest are the same tourist-heavy places where hotels, shops and short-term accommodation compete hardest for space, and where the four-city group outside the big three is now cooling. What these figures do not tell us is what visitors will actually pay: the data is a single snapshot of land values as of July 1 and says nothing about room rates, rents or availability.