Japan's Land Values Reach Highest Levels Since 1991
On March 26th, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) unveiled the latest figures for nationwide land values, highlighting a resurgence in the workplace return trend, a rebound in international tourism, and a shift in interest from Niseko to more affordable ski resort destinations.
The data released indicates a 2.3% increase in the average value of land across various uses, marking the highest point since 1991. This represents a noticeable acceleration from the 1.6% increase recorded in 2023 and the 0.6% rise in 2022. Specifically, residential land values saw a 2.0% increase, while commercial land values jumped by 3.1%.
In the broader Tokyo area, encompassing Tokyo, Saitama, Chiba, Kanagawa, and Ibaraki, land values surged by an average of 4.0%, continuing a three-year trend of annual growth and surpassing the previous year's growth by 1.6 percentage points.
Central Tokyo and major train station vicinities experienced some of the most significant value increases. This surge is attributed to a growing preference for locations that offer easy access to workplaces or a convenient commute. Land values in Tokyo's 23 wards increased by 5.4% for residential purposes.
Akasaka claims the title for Japan's most expensive residential land, with a plot valued at 5.35 million Yen per square meter, reflecting a 4.5% increase from the previous year. This upscale neighborhood, known for its affluent residences, embassies, and luxury hotels, benefits from nearby high-rise developments, including the newly launched Azabudai Hills project, which has further boosted land values.
Commercial land values in Tokyo's 23 wards have risen by 7.0%, building on the 3.6% increase seen in 2023. The prime commercial land under the Yamano Music Building in Ginza is now valued at 55.7 million Yen per square meter, up 3.5% from last year. Ginza's uptick is fueled by heightened spending by affluent domestic consumers and the resurgence of international tourism.
Asakusa has notably prospered from the swift recovery of the tourism sector, with the top five increases in commercial land values in Tokyo all located here, witnessing annual hikes of 15 to 18%. The first two months of 2024 saw 5.476 million visitor arrivals, exceeding the figures from the same period in 2019 by 3.4%.
Ski Areas Show Growth Outside Niseko
In the nationwide context, Furano, a rising star among ski resort towns in Hokkaido, saw the most significant increase in residential land values, with a site in Kitanominecho near the ski slopes jumping by 27.1%. This growth is driven by an influx of skiers and foreign developers attracted by the area's lower land prices compared to Niseko.
Kutchan experienced a more modest increase of 1.8% in residential land values in 2024, a slowdown from the explosive 30% yearly increases between 2018 and 2020. A commercial plot in Kutchan saw a 7.7% rise this year, indicating a tapering from the nearly 60% annual growth in the preceding two years.
Hakuba, located in Nagano Prefecture, also witnessed a significant 30.2% increase in commercial land values near the Happo-One ski slopes, following a 6.17% rise in 2023. The area's appeal to developers is on the rise, highlighted by Banyan Tree's announcement of a new 156-room hotel near the slopes, slated for opening in 2026. This marks Banyan Tree's debut in Japan, following the cancellation of a planned hotel in Niseko in July 2023. Unlike Niseko, which relies heavily on international visitors, Hakuba benefits from a balanced mix of domestic and foreign tourists, an advantage reinforced during the pandemic due to its accessibility from Tokyo.
