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PR Newswire
23-03-2016, 02:29 AM
source: http://www.wsj.com/articles/japanese-lan...1458645819
TOKYO—Japanese land prices last year rose for the first time in eight years, led by strong demand for commercial properties in big cities, pointing to one bright spot from the Bank of Japan ’s easy-money policy.
The nation’s single most expensive square meter was located underneath a store selling musical instruments and compact discs in Tokyo’s Ginza district, according to the land ministry, which estimated that its value rose 18.6% to 40.1 million yen ($358,000). Double-digit increases were common in Ginza and other commercial areas frequented by tourists as the number of visits by Chinese and other Asian travelers surged.
[Image: BN-NE858_JLAND_P_20160322060622.jpg] ENLARGE
By contrast, land prices fell in most rural areas that are undergoing a rapid depopulation, virtually canceling out the big-city increases. Overall, a land ministry report issued Tuesday found the average price of land nationwide rose by 0.1% in the year to Jan. 1, 2016, the first increase since the global financial turmoil in 2008 and only the third annual rise since the collapse of Japan’s land-price bubble in the early 1990s.
“There is strong demand for retail, hotels and the like in the central areas of major cities,” the land ministry’s report said.
The Bank of Japan’s policies including large-scale purchases of government bonds have led to a steady fall in long-term interest rates that has accelerated this year. Major banks are now offering home loans at annual interest of less than 0.5%, excluding initial fees.
The banks are under pressure because most government bonds are now yielding negative interest in the wake of the Bank of Japan’s January decision to introduce subzero rates on certain deposits it accepts from commercial banks.
Commercial land prices in Tokyo increased by an average of 2.7% in 2015. The commercial centers of Osaka and Nagoya, two other large metropolitan areas, recorded similar gains. Residential land prices in Tokyo also rose slightly but not enough to prevent a decline in the national average.
“Signs that land prices are recovering can be clearly observed,” said Hirotaka Sugiyama, president of major developer Mitsubishi Estate Co. , in a statement. He said a Mitsubishi Estate office building next to Nagoya Station that opened this month and another opening next month in Tokyo’s top financial district are both almost fully rented.
Chinese investors see Tokyo as a relative bargain compared with New York or London and have helped push Japanese land prices higher. However, the economic slowdown in China as well as global market turmoil and the yen’s recent rise could make this year less favorable than 2015 for Japanese real-estate prices, local industry experts say.
The land ministry report includes prices for more than 25,000 locations across Japan. The prices are estimated values calculated by real estate appraisers and don’t represent actual sales prices.
TOKYO—Japanese land prices last year rose for the first time in eight years, led by strong demand for commercial properties in big cities, pointing to one bright spot from the Bank of Japan ’s easy-money policy.
The nation’s single most expensive square meter was located underneath a store selling musical instruments and compact discs in Tokyo’s Ginza district, according to the land ministry, which estimated that its value rose 18.6% to 40.1 million yen ($358,000). Double-digit increases were common in Ginza and other commercial areas frequented by tourists as the number of visits by Chinese and other Asian travelers surged.
[Image: BN-NE858_JLAND_P_20160322060622.jpg] ENLARGE
By contrast, land prices fell in most rural areas that are undergoing a rapid depopulation, virtually canceling out the big-city increases. Overall, a land ministry report issued Tuesday found the average price of land nationwide rose by 0.1% in the year to Jan. 1, 2016, the first increase since the global financial turmoil in 2008 and only the third annual rise since the collapse of Japan’s land-price bubble in the early 1990s.
“There is strong demand for retail, hotels and the like in the central areas of major cities,” the land ministry’s report said.
The Bank of Japan’s policies including large-scale purchases of government bonds have led to a steady fall in long-term interest rates that has accelerated this year. Major banks are now offering home loans at annual interest of less than 0.5%, excluding initial fees.
The banks are under pressure because most government bonds are now yielding negative interest in the wake of the Bank of Japan’s January decision to introduce subzero rates on certain deposits it accepts from commercial banks.
Commercial land prices in Tokyo increased by an average of 2.7% in 2015. The commercial centers of Osaka and Nagoya, two other large metropolitan areas, recorded similar gains. Residential land prices in Tokyo also rose slightly but not enough to prevent a decline in the national average.
“Signs that land prices are recovering can be clearly observed,” said Hirotaka Sugiyama, president of major developer Mitsubishi Estate Co. , in a statement. He said a Mitsubishi Estate office building next to Nagoya Station that opened this month and another opening next month in Tokyo’s top financial district are both almost fully rented.
Chinese investors see Tokyo as a relative bargain compared with New York or London and have helped push Japanese land prices higher. However, the economic slowdown in China as well as global market turmoil and the yen’s recent rise could make this year less favorable than 2015 for Japanese real-estate prices, local industry experts say.
The land ministry report includes prices for more than 25,000 locations across Japan. The prices are estimated values calculated by real estate appraisers and don’t represent actual sales prices.
