First Time In Six Years, Japan's Land Prices Drop Due To COVID-19 Pandemic

JAKARTA - Land prices in Japan fell by an average of 0.5 percent in 2021 from the previous year, the first time in six years due to falling foreign demand during the COVID-19 pandemic.

Data released by the National Tax Administration on Thursday July 1 showed land prices on January 1 in 39 of the country's 47 prefectures, with the Tokyo, Osaka and Aichi metropolitan areas and 10 other prefectures experiencing declines, after rising in the previous year.

Shizuoka saw the steepest decline of 1.6 percent during the COVID-19 pandemic, followed by Gifu and Ehime, both down 1.4 percent. Many other prefectures are expanding their margins of decline, citing Kyodo News Thursday July 1.

Land prices in seven prefectures rose, down from 21 a year ago, with margins of gain narrowing. Fukuoka saw the biggest gain of 1.8 percent. Prices in Okinawa were up 1.6 percent, with margins of gain shrinking sharply from a 10.5 percent increase last year.

Of the 47 prefectural capitals, prices fell in 22 capitals, compared with a year ago, especially in tourist spots and downtown areas that are usually popular with foreign tourists.

Land prices on Omiya Street, Nara have decreased by 12.5 percent. Meanwhile, prices on the Sannomiya Center Gai shopping street in Kobe decreased by 9.7 percent and Midosuji street in Osaka experienced a decline of 8.5 percent.

The Kokusai-dori shopping street in Naha, Okinawa, fell 1.4 percent after posting a record high of 40.8 percent last year.

Land prices in the eight capitals rose, down 30 from the previous year's capitals, supported by development projects. The other seventeen remained at the same level.

The plot of land in Tokyo's Ginza shopping district, in front of the Kyukyodo stationery shop, is the most expensive for this year in Tokyo, with a price per square meter of 42.72 million yen, or about 384,500 US dollars.

Nevertheless, the price still showed a decline of 7.0 percent from the previous year, the first decline after previously increasing for seven consecutive years.

Meanwhile, land designated as evacuation zones in parts of Fukushima Prefecture after the 2011 nuclear disaster continues to show no value in the data.

To note, the tax agency's annual survey of prices per 1 square meter of land facing the main road on January 1 covered about 325,000 spots across Japan this year. This survey was conducted for the calculation of inheritance tax and gift tax.

"There is a decline in downtown areas and tourist spots," a tax agency official said, citing Reuters.