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Saturday, Sept. 25, 2010
Adding value to real estate
Land prices across Japan fell in the year ended July 1 at 21,457, or 98.5 percent, of the 21,786 locations surveyed annually by the land and infrastructure ministry. There was almost no improvement from the previous one-year period, when Japan was hit by the global recession and land prices showed a decline at 98.8 percent of the locations surveyed.
The nation's average price for residential land fell 3.4 percent from a year before, marking the 19th straight year of decline, and the average commercial land price fell 4.6 percent for the third consecutive annual drop. A long deflationary period, the slow pace of economic recovery as well as a graying population are apparently working to push land prices down.
Although land prices in the Tokyo, Osaka and Nagoya regions fell for the second year, the average rate of fall in the regions' residential land price decreased from the previous 5.6 percent to 2.9 percent and the figure for the regions' commercial land price dropped from 8.2 percent to 4.2 percent. Housing demand at popular residential areas did pick up, helped by tax reduction measures for those who take out housing loans, while low interest rates encouraged real estate investment in commercial areas.
Outside the Tokyo, Osaka and Nagoya regions, the average residential land price fell for the 18th straight year and the average commercial land price dropped for the 19th year.
The survey shows that efforts to make cities and towns more convenient for residents or more attractive to tourists contribute to raising land prices or making them level off.
In Ise, Mie Prefecture, the restoration of old streets helped to attract more worshippers to Ise Shrine. An increasing number of foreign tourists are visiting the Niseko ski resort in Kuthcan, Hokkaido, because of free bus services linking the town's center to lodging areas.
The central government should push steps that help local governments make their towns and cities attractive through proper urban planning, such as the concentration of stores, hospitals and nursing care facilities in their central areas.