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Wednesday, April 11, 2012
Disasters impact land prices
For the fourth consecutive year, Japan's land prices have fallen. Prices decreased an average 2.6 percent in 2011, but the decline was smaller than the 3.0 percent in 2010 as the economy bounced back from the 3/11 disasters. Commercial land prices slipped 3.1 percent in 2011, less than the 3.8 percent drop in 2010, and residential land prices fell 2.3 percent, less than the 2.7 percent decline in 2010.
Fortunately, the triple disasters did not cause an overall steep drop in land prices nationwide. But attention must be paid to the fact that the disasters caused sharp declines in land prices in certain locations. Residential areas in Fukushima Prefecture, which was most affected by the nuclear crisis, saw land prices fall 6.2 percent in 2011 compared with 3.4 percent in 2010. There was a net population outflow of some 31,000 in 2011 — more than five times the corresponding figure in 2010.
While residential land prices in the Tokyo megalopolis declined 1.6 percent, those in the Osaka and Nagoya megalopolises fell 1.3 percent and 0.4 percent, respectively. In the Nagoya area and cities lying to the west of it, many areas saw rises in land price thanks to an influx of people from the Tohoku region. Iwate, Miyagi and Fukushima prefectures together saw a net population exodus of more than 40,000.
The Nagoya area saw land prices go up in 147 locations in 2011, double the 2010 figure and the Osaka area saw land prices rise at 165 locations, up from the 8 in 2010. In the Tokyo area, land prices rose at 91 locations, an increase of 13. Efforts are called for to prevent land speculation in areas that have experienced an influx of residents from Tohoku.
In municipalities devastated by the 3/11 disasters, there was polarization of land price movements. While land prices shot up at highland areas, land prices fell in areas destroyed by the tsunami or affected by liquefaction. Land prices soared by 60.7 percent in one highland area in Ishinomaki, Miyagi Prefecture. Many areas that had been submerged by the tsunami saw their land prices decline by more than 10 percent. In Urayasu, Chiba Prefecture, average land prices fell 7.5 percent due to liquefaction.
To stabilize land prices in disaster-hit areas, serious efforts must be made to utilize land in ways that will enhance its value, make affected areas more resistant to earthquakes and tsunamis, and establish better emergency evacuation routes and warning systems.