Japanese Land Prices Experience Highest Growth in 33 Years

In 2023, Japan experienced the fastest growth in land prices in 33 years, marking a significant milestone as the nation rebounds from the economic impacts of the COVID-19 pandemic. The government survey released on Mar 26 revealed that land prices returned to pre-crisis levels, signaling a robust economic recovery and a positive outlook for the future.

Average nationwide land prices increased by 2.3 percent over the year through Jan 1, the highest rate of growth since 1991, when the country witnessed an 11.3 percent surge in land prices. This acceleration in land prices was attributed to the economic revival and the resurgence of foreign visitors following the pandemic-induced slowdown.

The Ministry of Land, Infrastructure, Transport, and Tourism noted that the upward trajectory of land prices has strengthened, signaling a shift towards the end of deflation and contributing to overall economic optimism.

Residential land prices also saw a substantial increase of 2.0 percent, the fastest growth rate since 1991, driven by solid housing demand in urban areas and locations with convenient transportation options. Additionally, foreign demand for vacation homes and condominiums in resort areas such as Furano city in Hokkaido contributed to the rise in prices.

Commercial land prices continued their upward trend, advancing by 3.1 percent for the third consecutive year. This growth was consistent with the rate seen in 2020, indicating sustained resilience in the commercial real estate sector.

Overall, the robust growth in land prices, coupled with other positive economic indicators such as surging stocks, wage growth, and stable consumer inflation, underscores Japan's progress toward economic recovery and sets the stage for continued momentum in the future.