``Social and economic activities have returned to pre-coronavirus levels,''
said an expert in this year's land price announcement. This is an average increase of 2.3% compared to last year, marking the third consecutive year of increase.
On the other hand, "unusual changes" are also occurring in the field of home purchase and resort development.
We will provide detailed information, including the impact of the lifting of the negative interest rate policy, along with commentary from experts.
table of contents
Where is the highest price?
Points with high rate of increase
Demand for apartments in the booming city center
On the other hand, prices for detached houses are also decreasing.
Negative interest rates have been lifted. What is the situation when purchasing a condominium?
“Unusual changes” in various places due to the rise
What did the experts see?
Open table of contents
table of contents
table of contents
Where is the highest price?
Points with high rate of increase
Demand for apartments in the booming city center
On the other hand, prices for detached houses are also decreasing.
Negative interest rates have been lifted. What is the situation when purchasing a condominium?
“Unusual changes” in various places due to the rise
What did the experts see?
The Ministry of Land, Infrastructure, Transport and Tourism has released the results of the ``Land Price Publication,'' which investigated prices as of January 1, targeting approximately 26,000 locations nationwide.
According to the survey, the total value of residential and commercial land nationwide increased by an average of 2.3% compared to last year, for the third consecutive year.
The rate of increase also increased by 0.7 points from last year.
Land prices across the country rose by 11.3% in 1991, then began to decline the following year, remaining sluggish and never exceeding 2%.
By usage, the national average for residential land increased by 2.0% for the third consecutive year.
Of this, the "three metropolitan areas" of Tokyo, Osaka, and Nagoya increased by 2.8%, and the "four regional cities" of Sapporo, Sendai, Hiroshima, and Fukuoka increased by 7.0%.
In addition, the rate of increase in other regions increased by 0.6%, increasing the rate of increase by 0.2 points from last year, making it even clearer that the rise in land prices is spreading to rural areas.
On the other hand, the national average for commercial land increased by 3.1%, an increase for the third consecutive year.
In addition to the high growth rates in the 3 metropolitan areas and 9.2% in the 4 regional cities, the 3 metropolitan areas also increased by 0.6%, marking the second consecutive year of growth.
In both regions, the rate of increase has expanded from last year.
In addition to recovery from the impact of the new coronavirus and normalization of economic activity, the number of foreign tourists has increased due to the weak yen, and demand for land has increased in industries such as restaurants and hotels. This has resulted in an increase in land prices nationwide.
Where is the highest price?
[Commercial area]
4-chome Ginza, Chuo-ku, Tokyo
The highest land price in Japan was 55.7 million yen per square meter in the commercial area of ``Yamano Musical Instruments Ginza Main Store'' located in Ginza 4-chome, Chuo-ku, Tokyo. This was the highest price for 18 consecutive years.
The increase rate was +3.5%, an increase of 2 points from last year. In addition to strong consumption among the wealthy, the weaker yen has led to an increase in consumption by foreigners visiting Japan, so-called inbound demand, which led to the expansion of the rate of increase.
【Residential areas】
Akasaka 1-chome, Minato-ku, Tokyo
In residential areas, the price was 5.35 million yen per square meter in Akasaka 1-chome, Minato-ku, Tokyo for the seventh consecutive year. The increase rate was +4.5%, an increase of 2.1 points from last year.
In addition to the strong demand for condominium land in the upscale residential area, the opening of a complex in the surrounding Azabudai district last November has further raised expectations for liveliness and convenience.
[Industrial area]
Tokai 2-chome, Ota-ku, Tokyo
For the 12th year in a row, the highest industrial site was Tokai 2-chome, Ota-ku, Tokyo, at 762,000 yen per square meter. The increase rate was +3.0%.
With good access to Tokyo Port, Haneda Airport, and the Metropolitan Expressway, demand as a logistics facility continued to be strong.
Points with high rate of increase
In this latest land price announcement, areas where major semiconductor manufacturers have factories and areas popular with foreign tourists accounted for the highest rate of increase.
[Commercial area]
Among commercial areas, the highest rate of increase in land prices was in Otsu, Otsu Town, Kumamoto Prefecture, with an increase of 33.2%. Second place was Tsukure, Kikuyo Town, also in Kumamoto Prefecture, with an increase of 30.8%.
In Kikuyo Town, a factory for Taiwanese semiconductor giant TSMC was completed in February, and related companies are preparing offices and hotels in the surrounding area, including the neighboring Otsu Town, leading to a rise in land prices.
Third place was Saiwaimachi, Chitose City, Hokkaido, with an increase of 30.3%. This is also due to the influence of semiconductor factories. In Chitose City, construction is progressing on a new factory for Rapidus, which aims to domestically produce cutting-edge semiconductors, and demand for office space for related companies is increasing.
【Residential areas】
The residential area with the highest rate of increase in land prices was 27.9% in Kitanomine-cho, Furano City, Hokkaido. As a resort area where you can enjoy sightseeing and skiing all year round, demand for vacation homes has increased from foreigners and others.
Second place was Sakaemachi 2-chome, Chitose City, Hokkaido, with an increase of 23.4%. Demand for Rapidus as housing for employees is increasing.
Third place was Ueno, Miyakojima City, Okinawa Prefecture, with an increase of 21.2%. This result reflects its popularity as a migration destination.
[Industrial area]
Among industrial areas, Shiohama 3-chome, Ichikawa City, Chiba Prefecture, had the highest increase of 29.0%, followed by Futamata Shinmachi, Ichikawa City, which came in second place with an increase of 28.1%. Third place was Hinode 2-chome, Funabashi City, Chiba Prefecture, with an increase of 27.0%.
Both have good transportation access to Tokyo and the cost of acquiring land is cheaper than in the city, so demand was strong.
Demand for apartments in the booming city center
This time, the Tokyo area has seen significant growth in residential areas.
This growth is being driven by urban centers such as Toshima Ward and Minato Ward, where the growth rate is over 7%. This is clearly reflected in the prices of apartments in the city.
According to the real estate research company "Tokyo Kantei," the average price of condominiums sold in Tokyo's 23 wards in 2023 will be 116.3 million yen per unit, an increase of 41% by more than 33 million yen compared to the year before. Ta.
This is partly due to rising construction costs due to soaring material prices, but another reason is that apartments in central Tokyo, which are convenient for commuting to work, are becoming more popular due to the transition to Type 5 of the new coronavirus.
Condominiums in Tokyo's Shibuya Ward that are being sold by major real estate companies are expensive, ranging from 200 million yen to 500 million yen per unit, but with nearly two years left until completion, 65 units have been sold so far. are all sold out.
They are popular due to their convenience of being only a 7-minute walk from the nearest station and the spaciousness of their premises, and are often purchased by wealthy domestic investors and "power couples" with both parents working and high household incomes, as well as foreign investors. The number of inquiries received through the website has exceeded 6,000.
``The decreasing supply of apartments in the city center and the rarity of locations in high-end residential areas are also contributing to the high response.Even as construction costs and sales prices rise due to rising prices, there is steady demand mainly from wealthy people. (Satoshi Watanabe, Mitsubishi Jisho Residence)
On the other hand, prices for detached houses are also decreasing.
According to the latest land price announcement, while central Tokyo areas such as Chuo Ward and Minato Ward, which are Tokyo's 23 wards, will see high growth rates exceeding 7%, areas such as Edogawa Ward, Katsushika Ward, and Adachi Ward will only see increases in the 4% range. .
One of the reasons behind this is thought to be the difference in price trends between condominiums, which are common in the city center, and detached houses, which are common in areas such as Edogawa Ward, Katsushika Ward, and Adachi Ward.
According to the real estate research company "Tokyo Kantei", the average price of properties sold in Tokyo's 23 wards last year (2023) increased by over 40% for condominiums, but by 4% for detached houses. It remains to a certain extent.
Single-family homes with generous floor plans have become increasingly popular due to the increase in remote work during the coronavirus pandemic, but with the transition to Type 5, there is a growing movement for people to resume working.
Furthermore, due to rising construction costs, sales prices tend to exceed the budgets of the primary buyers, and the popularity of detached houses appears to be subsiding.
Under these circumstances, there is a movement to lower the prices of detached houses in areas such as Edogawa Ward and Adachi Ward.
A major home sales company in Tokyo's Toshima Ward has reduced the price of a newly built house in Adachi Ward that went on sale in October last year by 10% this month.
As opportunities for commuting to work have increased, the distance of 15 minutes' walk from the nearest station has become a reason for people to avoid working, and we believe that demand has shifted to areas with better access to the city center.
There are other properties in Adachi Ward that have not found buyers and have had their prices reduced.
For this reason, the company has adopted a strategy for lowering sales prices by intentionally constructing new properties on narrower lots.
Even though the site is small, they have created a staircase in the living room to eliminate a hallway to create more living space, and a balcony on the roof to make the house more comfortable.
Motoharu Suzuki of Ichi Construction said, ``Sales of detached houses are in a very difficult situation, but we have no choice but to carefully understand customer needs in terms of price, facilities, etc.''
Negative interest rates have been lifted. What is the situation when purchasing a condominium?
Some people who are considering purchasing condominiums are concerned about the impact on mortgage interest rates following the Bank of Japan's lifting of its negative interest rate policy.
Yasunao Ogura (45), a company employee from Fukuoka City, lives in a rented apartment with his family of four, including his wife and two children.
Following his 2-year-old son, our first daughter was born in January this year, and we started seriously considering buying an apartment in hopes of living in a larger room.
In the midst of this, the negative interest rate policy was lifted.
He says he is gathering information through the media about whether mortgage interest rates will rise in the future.
I also calculated the amount of monthly payments that would increase due to the rise in interest rates.
``Recently, when I hear the words about ending the negative interest rate policy or raising mortgage interest rates on TV, I watch and listen with a sense of ``Oh!''.I had never thought about fixed mortgage interest rates until now. However, I did some research.'' (Yasunao Ogura)
On this day, Mr. Ogura and his family visited a housing builder in Fukuoka City and asked for advice on how much their burden would increase if interest rates rose if they chose a variable interest rate mortgage.
The person in charge explained that, for example, if you take out a 35-year loan of 50 million yen with an annual interest rate of just over 0.3%, your monthly payments will likely increase by several thousand yen for every 0.1 point increase in the interest rate.
She then informed me that if the interest rate rose by about 1 percentage point to 1.3%, my monthly payment could increase by 20,000 to 30,000 yen.
Mr. and Mrs. Ogura are thinking of reconsidering their options, including properties that are cheaper than they expected, while also keeping in mind future increases in interest rates.
``If the interest rate is going to go up and my monthly payments are going to increase, I honestly think I might have to consider a smaller, cheaper room.'' ``If I stretch my back too much, my
life will become difficult.'' So, while looking at that balance, I hope we can find a property that will allow us to repay the loan within a reasonable range.'' (Mr. and Mrs. Ogura)
“Unusual changes” in various places due to the rise
“Postponement or cancellation of development plans”
While land prices are rising due to the construction of a factory by Rapidus, which aims to domestically produce cutting-edge semiconductors, a certain ``unusual change'' is occurring in Hokkaido.
In addition to rising material prices, the construction of the Rapidus factory has exacerbated the labor shortage in the construction industry, leading to a number of cases in which development plans in Hokkaido have been forced to be postponed, changed, or canceled.
Among these, the construction of the tallest building in Hokkaido is planned on the site of the commercial facility ``ESTA'' in front of Sapporo Station and the adjacent area, which will be directly connected to Sapporo Station on the Hokkaido Shinkansen, which is scheduled to be extended. Construction was scheduled to begin during this year.
However, in February, JR Hokkaido announced that due to soaring material prices and labor costs, the project cost, originally estimated at around 250 billion yen, is expected to increase, and that it is revising the plan.
The building's completion date may be delayed from the originally planned 2028 fiscal year, and the company is continuing to discuss with Shimizu Corporation, which will be in charge of design and construction, about downsizing the building in order to reduce construction costs.
"Opening will be delayed by two years"
These ``unusual changes'' are occurring one after another in the Niseko area, which is one of Japan's leading ski resorts and where the development of luxury hotels, condominiums, and villas for wealthy people is popular.
The condominium project planned next to the ski resort was originally scheduled to open in 2026, but it was revealed in February that it would be opened in 2028, two years later.
This condominium is attracting attention because Hoshino Resorts is entering the operation in the Niseko area, but it is said that the soaring cost of construction materials and a lack of labor made it difficult to construct it within the expected construction period. is.
“Before Rapidus entered the market, there had been talk of a shortage of workers in the construction industry, but after the decision was made to move in, the shortage became more serious. We have to overcome the shortage and build a solid business.'' (Shutaro Ishimaru, president of Zekkei Group, which handles development)
“Lack of housing for migrants”
Nozawa Onsen Village in Nagano Prefecture is popular with tourists.
In an effort to capture inbound demand, foreign investors are increasingly purchasing vacant houses and inns that are scheduled to go out of business, and opening lodging facilities and restaurants.
As a result, the average land price of residential areas began to rise last year for the first time in three years, and this year it increased by 13%.
One of the foreign investors, British Peter Douglas, runs 14 lodging facilities in the village, and last year he opened a new one for wealthy people that costs up to 170,000 yen per night. I did.
In January and February, when the full-fledged ski season begins, all of the accommodation facilities it manages were almost fully booked, and they believe that the number of investors who want to capture inbound demand will continue to increase.
``Nozawa Onsen Village is originally a famous tourist destination, but its popularity is increasing.There are more and more foreign investors who want to do business there, so I think the village will become even more famous.'' (Peter Douglas)
On the other hand, as real estate investment becomes more active, the housing situation in the village is changing.
According to Nozawa Onsen Village, housing prices are rising in the center of the village, where the hot spring town is located, and there is a shortage of affordable housing for immigrants and others.
For this reason, the village is planning to spend over 450 million yen to build two apartment complexes where immigrants can move in, and plans to accept them from December this year.
``Foreign investors are purchasing properties at much higher prices than we expected, so there are no houses available for immigrants to purchase. We want to create an environment where it is easy to do so.'' (Naoki Arai, Manager, Construction and Water Supply Division, Nozawa Onsen Village)
What did the experts see?
We asked Takeshi Ide, Senior Researcher at the real estate research company Tokyo Kantei, about the results of this land price announcement.
Q. Both residential and commercial land rose for the third consecutive year, and the rate of increase also expanded.
A. This is a significant increase, as the national average has not increased by more than 2% in over 30 years. It may be safe to say that the momentum of social and economic activity has returned to the level before the spread of the new coronavirus.
Q. The rate of increase is expanding even in “local areas”
A. Although it has become clear that the trend of rising land prices is spreading to rural areas, there are still many regions where land prices remain negative. In this respect, it can be said that the polarization between urban areas and rural areas, and prosperous areas and non-bustling areas, was conspicuous.
Q. What is the background behind the increasing polarization?
A. This is because the emphasis on convenience has once again become stronger. As the spread of the new coronavirus subsides, the number of people moving into Tokyo and Osaka is increasing, and the convenience of transportation has been a major factor pushing up land prices.
Land prices are rising not only in the city center, where people are close to their workplaces, but also in the suburbs, in areas that are close to stations and have been redeveloped into apartments and other areas.
On the other hand, sales of detached houses, which are often located far from the nearest station, are weaker than condominiums, and land prices in areas with many detached houses are experiencing slower growth than in central Tokyo.
Furthermore, in rural areas, land prices are becoming increasingly polarized in areas where local governments are putting effort into child-rearing measures, and where development of shopping malls and childcare facilities is progressing in conjunction with the development of shopping malls and childcare facilities, and in areas where they are not.
Q. The growth in land prices in tourist destinations is also noticeable.
A. This is largely due to the rapid increase in the number of foreign visitors to Japan due to the weak yen. Tourist spots are crowded with foreigners, and in addition to staying at hotels, there are also many people buying high-quality Japanese products as souvenirs to take home.
This time, many resort areas are at the top of the list of land price growth rates, and one of the reasons for the rise is that foreigners are buying vacation homes to enjoy skiing and other activities.
Q. What is the impact of the Bank of Japan's change in monetary policy?
A. Although the upward trend in land prices is expected to continue, the Bank of Japan's decision to lift its negative interest rate policy should be noted in terms of looking ahead.
The degree to which financial institutions raise mortgage interest rates is important, and if they raise them significantly, it may affect the purchasing decisions of people other than investors, the so-called ``actual demand group.''
Nowadays, the prices of both condominiums and detached houses are rising, making it difficult for people who actually need them to afford them.
With construction costs rising, it is difficult to imagine that housing prices will fall significantly anytime soon, but some in the market believe that the time when prices will hit a ceiling is approaching.
If you are considering buying a home now, one option is to wait for the price to become cheaper rather than forcing yourself to buy.