Photo/Illutration High-rises in central Tokyo (Asahi Shimbun file photo)

Land prices rose 2.3 percent on average nationwide, a third consecutive year-on-year increase and the strongest rise since the financial crisis of 2008.

Land ministry figures announced on March 26 are based on a survey of about 26,000 residential, commercial and other land plots as of Jan. 1.

Sixty-five percent of those survey points registered increases from the year before.

At 60 percent, land prices exceeded 2020 levels before the novel coronavirus spread.

“All in all, land prices have returned to pre-pandemic levels,” a ministry official said.

Residential land prices rose 2 percent on average nationwide.

Increases in the three major metropolitan areas around Tokyo, Osaka and Nagoya averaged 2.8 percent.

As apartment prices soared in Tokyo, prospective homeowners have been buying more affordable properties in neighboring prefectures.

In the cities of Nagareyama and Ichikawa in Chiba Prefecture, which are easily accessible to Tokyo via public transportation, increases in residential land prices topped 10 percent.

In Urayasu, Kashiwa, Abiko and Funabashi in Chiba Prefecture and Warabi and Toda in Saitama Prefecture, increases surpassed 5.4 percent, the average for Tokyo’s 23 wards.

Outside the three largest metropolitan areas, the four major cities of Sapporo, Sendai, Hiroshima and Fukuoka recorded an average increase of 7 percent due to ongoing large redevelopment projects.

Construction of new semiconductor plants pushed up residential land prices in Chitose, Hokkaido, and Kikuyo, Kumamoto Prefecture.

Multiple sites in Chitose logged price increases of around 20 percent.

Commercial land prices rose 3.1 percent on average nationwide.

All survey points in the capital’s 23 wards marked increases of 5 percent or more due to strong demand for offices and stores.

Yamano Music Co.’s main store in Tokyo’s Ginza district sat on the nation’s highest-priced plot for the 18th year in a row. It was valued at 55.7 million yen ($368,000) per square meter.

Increases in commercial land prices exceeded 10 percent in Takayama, Gifu Prefecture, and Sapporo’s Susukino district, apparently reflecting a rebound in foreign tourist numbers.

Still, land prices continued to decline in both residential and commercial districts in rural areas suffering from depopulation.

Masaaki Sakamoto at the Sumitomo Mitsui Trust Research Institute said he expects land prices will rise gradually due partly to demand for new homes.

“Interest rates on housing loans will rise slightly even if they do because the Bank of Japan said the monetary environment will continue to be accommodative,” Sakamoto said. “Increases in wages are expected to give homebuyers a boost.”

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