Japan land prices down for 5th year, but decline further slows

Land prices across Japan at the start of the year declined an average 1.8 percent from a year earlier for the fifth straight yearly fall as demand remained weak mainly in rural areas, the National Tax Agency's annual survey used for tax calculation purposes showed Monday.

But real estate markets in urban areas continued to pick up, causing the pace of decline to slow, according to the survey of roadside land prices at some 360,000 benchmark points. Prices fell 2.8 percent in last year's survey.

A land price recovery was notable in major cities and in some of the northeastern prefectures where demand for residential land has been growing due to reconstruction from the March 2011 earthquake, tsunami and nuclear disaster.

In last year's survey, land prices fell on year in all 47 prefectures, but this year's data showed they went up 1.7 percent in Miyagi Prefecture in northeastern Japan and 0.1 percent in Aichi, central Japan.

The pace of land price fall slowed in all other prefectures, the agency said.

The recovery of land prices was partly attributable to increased investment in real estate assets as expectations grew for more aggressive monetary easing ahead of the general election late last year along with solid demand for new homes and condominiums prior to the planned consumption tax rate increase from next April.

In the northeastern prefectures of Miyagi, Iwate and Fukushima hit hardest by the 2011 disaster, housing construction for people moving away from coastal areas affected by tsunamis pushed up land prices.

In Fukushima, prices were down 1.6 percent, but the decline compares with a 6.7 percent drop the preceding year.

In Tokyo, average land prices edged down 0.3 percent after falling 1.2 percent a year earlier.

Reflecting the market recovery in urban areas, the highest prices among sample points in prefectural capitals increased in Yokohama, Sapporo and Nagoya by 5.1 percent, 3.2 percent and 2.4 percent, respectively, the agency said.