Japan's 3 metropolitan regions see 1st commercial land markup in 5 yrs

Japan's three major metropolitan regions scored an average commercial land price hike in the year to July 1 for the first time in five years, the government said Thursday.

Land prices have been recovering in major cities as Prime Minister Shinzo Abe's economy-boosting policies have stimulated investment in real estate and housing, analysts said.

The average commercial land price hike came to 0.6 percent for the Tokyo, Nagoya and Osaka metropolitan regions. Average residential land prices logged a small decline of 0.1 percent.

Land prices rose at some half of the commercial locations subjected to the land price survey in the regions and at some 30 percent of the residential locations. The Nagoya region posted a 0.7 percent hike in commercial land prices, the highest among the three regions, and recorded the same hike in residential land prices.

On a nationwide basis, average commercial and residential land prices continued falling, but the rates of decline slowed. Commercial land prices fell 2.1 percent for the sixth straight year of decline, while residential land prices dropped 1.8 percent, down for 22 consecutive years.

In regions other than the three metropolitan regions, commercial land prices dropped 3.1 percent and residential land prices fell 2.5 percent.

"Low interest rates and tax cuts for housing loan borrowers have worked to expand housing demand before the planned consumption tax hike" next April, said a land ministry official.

Among the 47 Japanese prefectures, Osaka scored the largest commercial land price hike of 1.1 percent, followed by Kanagawa, Aichi, Tokyo and Miyagi.

Aichi logged the largest residential land price rise of 0.8 percent, followed by Miyagi, Tokyo and Kanagawa.

Land prices at some of the locations hit by the March 2011 earthquake and tsunami in northeastern Japan rose as residents moved to higher ground and as the result of increased demand for reconstruction.

Among residential locations for the annual government land price survey, one in Otsuchi, Iwate Prefecture, registered the largest hike of 30.5 percent. Nine locations in the disaster-affected region were among the top 10 residential land price gainers.

A location in Tokyo's Ginza shopping district logged the highest land price among all locations for the survey for the eighth straight year. The price rose to 20.4 million yen per square meter from 19.7 million yen a year earlier.