The average overall price of land in Japan fell for the second year in a row, as the COVID-19 pandemic continued to wreak havoc in urban centers, particularly the Osaka region, according to government data.
The average price of commercial, residential and industrial land is down 0.4% this year from a year ago, a slight improvement from the 0.6% drop in 2020, according to a report from the Ministry of Lands published September 21.
Ministry figures are based on prices as of July 1 and serve as the basis for commercial real estate transactions.
The average price of commercial real estate fell 0.5% year on year in 2021, after falling 0.3% last year.
Commercial areas in the three urban centers of Tokyo, Osaka and Nagoya hhave been hit hard by repeated COVID-19 states of emergency, which have forced many bars and restaurants to close permanently and dampened prospects for a rebound in the number of foreign tourists.
Commercial properties fell 0.6% in value in the Osaka area this year, the first decline in nine years. Last year, prices for commercial land rose 1.2 percent in the region.
Prices for commercial land in the Tokyo area rose 0.1 percent this year, well below the 1.0 percent pace last year.
The service sector has also been hit by anti-virus measures in the Nagoya area, but commercial properties rose 1.0% in value in the region this year, compared to a decline of 1.1% year-on-year. last.
The increase was attributed in part to a redevelopment project in central Nagoya that prompted companies to build more office buildings and hotels near the area.
Bars, restaurants and hotels also struggled in Sapporo, Sendai, Hiroshima and Fukuoka. However, overall prices for commercial land rose 4.6% in all four cities, driven by strong demand for office space.
The Meidi-ya Ginza commercial building in Tokyo’s Ginza district remained Japan’s most valuable real estate, priced at 39.5 million yen ($ 360,820) per square meter this year.
But the price fell 3.7% from 2020, falling below 40 million yen for the first time in four years.
For residential properties, the average price is down 0.5% this year, following a 0.7% drop in 2020.
Prices have risen or declined compared to last year in 34 prefectures, with Tokyo, Hokkaido, Miyagi and four other prefectures recording year-over-year increases.
The extension of a mortgage tax break has contributed to strong sales of luxury apartments in city centers. The spread of telecommuting to reduce the risk of infections has also encouraged more people to buy homes.
The average price of industrial property has increased by 0.8% this year.
Construction of distribution warehouses has accelerated to cope with the increase in online shopping amid the pandemic. Land prices have skyrocketed near freeway interchanges and other good shipping locations.