Land Price Rises for Four Straight Years

Land price in Japan at July 1st, 2025, marked rise for four consecutive years, and the fastest since 1992, according to the annual survey by prefectural governments. Foreign investments pushed up the price both in urban area and local resorts, encouraged by relatively cheap Japanese yen. It gradually gets hard for the people in Japan to purchase their own house in urban area.

The Ministry of Land, Infrastructure, Transport and Tourism releases land price of 21,000 points in Japan at January 1stevery year. The land price at July 1st is based on the survey by 47 prefectures which is about 26,000 points all over Japan. Both data complement each other as a basis of land trade. Making difference from them, Ministry of Finance also discloses street prices at January 1st every year as the basis for calculating inheritance tax.

 

The survey at July 1st, 2025, showed 1.0 percent of rise in residential land and 2.8 percent in commercial land. The average of land price for all uses grew by 1.5 percent from the previous year. The growth was the highest, since it marked 3.1 percent in 1991, when bubble economy steeply raised land price.

 

Three urban areas around Tokyo, Osaka and Nagoya showed higher price hike. Residential land price in Tokyo area increased by 3.2 percent, while commercial land price did 8.7 percent. Foreign investment has been active in land purchase in Tokyo.

 

Although Japanese yen against U.S. dollar stopped depreciating, as Bank of Japan shifted its ultra-easing monetary policy to moderate tightening, office rent in Tokyo is still relatively low, compared to that of New York or London. Investors can expect reasonable return from real estate in Tokyo.

 

The highest growth at a point was recorded in local area. The price of commercial land grew by 31.4 percent in Chitose city, Hokkaido, where semi-conductor maker, Rapidus, is constructing a major manufacturing facility. The small towns with increasing foreign travelers, such as Hakuba in Nagano or Takayama in Gifu, also showed steep rise of commercial land price.

 

Among the residential lands, the price rose by 27.1 percent in Furano, Hokkaido, where new residential buildings have been built. While resort building has been active in Niseko area in Hokkaido, the development is shifting to other area such as Furano. Makkari in Hokkaido, close to Niseko, and Miyakojima in Okinawa are other popular places with high growth of land price.

 

It gets apparent that the buyers of rooms in tall buildings in urban Tokyo are mostly foreign investors. Families tend to buy houses in the suburb of Tokyo, defying small but expensive houses in the center of Tokyo. In local area, land price in four cities, Sapporo, Sendai, Hiroshima and Fukuoka, showed outstanding rise. High land price in urban area may contribute to demographic decentralization in Japan.

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