Land prices
A recent news headline said: “Japan's land prices rise at strongest pace in 34 years”
Average land prices have been rising over the last 4 years and last year they rose by 2.7%, the highest rate since the bubble in 1991.
Why are land prices rising?
tourism
weak yen
new factories
Popular tourist areas had rapid price rises.
The weak yen makes Japan popular for overseas investors. 47% of all hotels purchased in Japan in 2024 were by overseas investors.
Areas around new factories (like semiconductors) had rapid price rises
In Tokyo is there an area you would like to buy a house in?
If I want the price to rise in the future, where do you recommend I buy a house in Tokyo?
Commercial land = companies / shops are built there
Residential land = houses / apartments
In Tokyo which wards do you think had the biggest price rises for Residential and Commercial land?
Do you think residential land prices rose faster in Chiba, Saitama or Yokohama?
Do you think residential land prices rose faster in Kobe, Kyoto or Osaka?
Land Prices
| Area | Residential (%) | Commercial (%) |
|---|---|---|
| Tokyo | 7.9 | 11.8 |
| - Nakano | - | 16.3 |
| - Suginami | 4.9 | 15.1 |
| - Musashino | 5.3 | - |
| - Chuo | 13.9 | - |
| - Minato | 12.7 | - |
| - Meguro | 12.5 | - |
| Yokohama | 7.2 | - |
| Chiba | 8.4 | - |
| Saitama | 4.8 | - |
| Osaka | 5.8 | 11.6 |
| Kyoto | 3.2 | 10.2 |
| Kobe | 2.7 | 5.5 |
Can you guess what areas had the fastest rising land prices in Japan last year (over 25%)?
Hakuba, Nagano (32.4%)
Hakuba in Nagano has the fastest growing land prices in Japan last year. Since 2020 they have skyrocketed 130%.
In the 24/25 winter season 890,000 people went to Hakuba to ski or snowboard.
What percentage do you think were from overseas?
46% were from overseas. Hakuba intentionally targeted overseas visitors because Japanese skiers have decreased by 40% since the peak in the 90’s.
Why do you think Japanese people are skiing and snowboarding less?
bubble
fewer young people
costs
less snow in some areas
They first targeted Australians and then Chinese. Why did they choose these countries?
short flights
snow quality - Japow!
The flights from these countries were short and Japan had superior snow quality. They created the term: “Japow” meaning “Japan powder” in advertising campaigns overseas.
Niseko has quite gentle slopes compared to Nagano. The local government realized that steep slopes appeal more to North Americans, Europeans as well as Australians so they became the next main target.
shallow / gentle slope < - > steep slope
What summer attractions or activities did Hakuba promote?
hiking
mountain views
chairlift / gondola rides to the top of mountains
lake activities - SUP, canoeing, rafting
Hakuba International School also set up a popular program that invites students from overseas do stay in Hakuba during the summer. They can enjoy studying science, art, music, the environment while enjoying outdoor activities.
2 weeks = 550,000 yen (excluding travel)
Many Australians have been buying land in Hakuba for years. Recently South East Asians have also started buying land in the area.
Onna, Okinawa (29%)
Many Japanese mainlanders have been moving to Okinawa in recent years. Why?
pace of life
cost of living
nature
culture
Onna Village had extremely high land price rises (29%) in the last year. Can you guess why?
it’s a beautiful area close to the beach
it’s outside the city centre so land is more affordable
many new hotels have been built in the area so staff want to live nearby
many people who will work at Junglia, the new theme park, want to live in the area
What is Junglia?
Do you want to go there?
What can we do there?
Do you think it will be a hit?
a hit = successful / popular
Ueno, on Miyakojima rose 23.1% for a similar reason. It’s the area around the popular tourist attraction: Ueno German Culture Village.
It has a replica castle, German restaurant, costume rental and kids activities.
Why do you think there is a German Culture Village on Miyakojima?
In 1873 a German ship was shipwrecked on the rocks near Miyakojima. Sailors from the nearby area went to rescue the Germans and Germany presented the area with a monument to say “Thank you.”
Kaminarimon Street (29%)
Why does this street in Asakusa attract so many tourists?
The Kamanarimon (Gate) is the entrance to Sensoji, Tokyo’s biggest temple.
The area also has Nakamise shopping Street where tourists can by traditional Japanese souvenirs.
What are these other popular attractions?
HanayakishiAmusement park is the oldest in Japan.
Hoppy Street has many small Japanese bars
The Asakusa Rickshaw area
Ozu, Kumamoto (33.3%)
TSMC, the Taiwanese Semiconductor Manufacturing Company, decided to build their new plant in the neighbouring town of Kikuyo.
Ozu’s land prices rose by 33% because workers needed places to live and suppliers moved into the area.
Kikuyo (Kumamoto) won the right to host the company’s first plant outside Taiwan. They beat areas in Germany and the US.
Why do you think TSMC chose Kumamoto?
subsidies
access to water (needed in the manufacturing process)
close to Taiwan
the government made it easy to establish the plant there. E.g. by assisting with paperwork and allowing 24/7 operation
Other chip makers (Sony) had plants in the area so the supply chain was established
sources:
https://housingjapan.com/blog/hakuba-land-prices-increase-again-japans-second-niseko/
https://www.asahi.com/ajw/articles/15429647
https://newsonjapan.com/article/143559.php
https://www.asahi.com/ajw/articles/15176891