Land prices jump 17% in Tokyo as economy recovers
Posted on | August 2, 2007
By REUTERS
TOKYO: Land prices in Tokyo jumped 17% last year in the biggest increase by far since Japan’s bubble years, government data showed on Wednesday, although the most pricey plots still lag peaks seen more than a decade ago.
In the capital’s fashionable Ginza shopping district, the home of upscale department stores and luxury brand stores such as Chanel and Cartier, average land prices soared by one-third to 25 million yen (RM728,000) per square metre.
That makes it the most expensive land in Japan, although the tax agency said this was still only two-thirds the peak of 36.5 million yen per square metre hit in 1992.
Led by the increase in Tokyo, average national land prices rose 8.6% last year, the tax agency said, jumping from a 0.9% increase the previous year – which had been the first national increase for 14 years.
Japan’s economic recovery has boosted demand for office buildings and fueled investment in real estate, although the rapid rises in Tokyo’s retail heart are likely to fuel concern that speculative investment may be driving up prices too quickly.
Tokyo land prices rose 5.5% in 2005, but the tax agency said much of rural Japan had yet to share in the recovery.
Land prices fell in 31 of Japan’s 47 prefectures last year, although the pace of the fall slowed in most of these regions.
Japan’s land prices had dived since the early 1990s after Japan’s asset price bubble burst, leaving a huge load of bad loans in the banking sector and crippling the Japanese economy for a decade.
The National Tax Agency evaluates land prices as of Jan. 1 every year to calculate property tax. The survey is one of several published in recent months showing that land prices have started rising in Japan.
A land ministry survey published in March said Japanese land prices rose for the first time in 16 years in 2006.
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