Bustling with foreign tourists, Tokyo's Asakusa district is seeing a 25 percent increase in commercial land prices near Tsukuba Express Asakusa Station compared to the previous year.

The rise is the eighth highest nationwide.

With the increase in inbound visitors, new restaurants and hotels are opening in the area.

“There are always people looking for vacant properties to open businesses targeting tourists,” said Kenichi Iwama, a local real estate agent. “If the location is good, it sells immediately even at a high price.”

The land ministry’s Sept. 17 benchmark report highlighted significant increases in land prices in popular tourist destinations such as Asakusa and resort areas.

Meanwhile, the residential property market is slowing in some regions as demand has failed to keep up with soaring prices.

On the back of the weak yen, the number of visitors to Japan has been increasing. It reached 21,069,900 in the first seven months of the year, surpassing 20 million at the fastest pace ever.

Spending by inbound tourists in the first half of the year hit a record high of 3.9 trillion yen ($27.56 billion).

The increase in foreign visitors has driven up land prices in tourist destinations nationwide.

Hakuba, Nagano Prefecture, saw a 30.2 percent increase from last year due to strong demand for hotel and condominium land.

Takayama, Gifu Prefecture, known for its traditional townscape, experienced a 27.1 percent increase in land prices driven by the demand for commercial properties.

In cities such as Nagano and Matsue, the average land price fluctuation has turned positive for the first time in 32 years.

Residential land prices are also on the rise.

In Onna, Okinawa Prefecture, a sought-after relocation destination, land values have soared by 29 percent.

Several areas in Miyakojima, also in Okinawa, have seen price increases of over 20 percent. Wealthy foreign buyers seeking vacation homes are driving up prices in Furano, Hokkaido.

Demand for apartment property in metropolitan areas is high, leading to price increases in Tokyo’s Shinjuku Ward, Nagoya, Kyoto and elsewhere.

The most expensive residential area is Akasaka 1-chome in Tokyo’s Minato Ward, with a price of 5.56 million yen per square meter, a 6.1 percent increase from the previous year.

The area is home to many embassies and is near the newly opened commercial complex, Azabudai Hills.

Residential land prices in the 23 wards of the capital’s central area continued to surge, increasing by 6.7 percent, compared to a 4.2 percent increase the previous year.

Although the average price of new apartments sold in the first half of this year decreased by 16.3 percent compared to the same period last year, it remained above 100 million yen.

“Land prices are not likely to fall as two factors to push them up--inflation and low interest rates--are in place,” said Yuto Ohigashi from the real estate agent Jones Lang LaSalle KK.

However, the upward trend in land prices has shown signs of slowing in some areas. The average rate of increase has fallen for both residential and commercial property in Sapporo, Sendai, Hiroshima and Fukuoka, compared to the previous year.

The four cities have been driving land prices in their wider regional areas.

While residential land prices in Sapporo increased by 3.6 percent, the momentum has weakened compared to the previous year's 12.5 percent.

Due to the rising land prices and construction costs, there has been a decline in home purchases, particularly in areas located far from train stations, even in the city center.

“One reason for the slowdown is that housing prices are becoming too high for the middle class,” said Mikito Yokoyama from the Hokkaido Association of Real Estate Appraisers.

In Sendai, where residential land prices increased by 6.3 percent, properties with poor accessibility are becoming less desirable. This trend is also evident in Tokyo's suburbs.

“Properties along popular railway lines or with good accessibility are selling well,” said an apartment sales representative from Daiwa House Industry Co. “But properties lacking distinctive features, such as those near stations, are taking a long time to sell, particularly when the price per tsubo--approximately 3.3 square meters--exceeds 3 million yen.”

(This article was written by Yoko Masuda and Kentaro Uechi.)