Post: Monday July 8, 2013
Ever since the Abe Administration commenced at the end of last year, stock prices have risen and the Japanese yen has depreciated. The Japanese economy has recovered to the status it was prior to the “Lehman Shock” in 2008.
The “Abenomics” that Prime minister Abe set as a goal has been discussed widely, and the Easy Monetary Policy that the Japan Bank set has excited the economists and businessmen. Such events seem to be reflected on the Posted Land Price announced on March 21st, which are known as the prime indicator of the economic climate and a guide to property transactions.
Note: The Posted Land Price is announced annually by the Land Appraisal Committee, Ministry of Land, Infrastructure, Transport and Tourism. It is the standard land price as of January 1st. It is used as the basis to calculate the price of property for public infrastructure developments as well as serving as a guide to general land transactions.
The posted land price as of January 1st, 2013 continued to decline in both residential and commercial properties for the fifth year since 2009. But the degree of the decline has continued to decrease for the past 3 years, and this year the data suggests that the decline may have come to an end around the Three Major Metropolitan Areas. More and more areas in the Yokohama and Kawasaki cities showed increases in the Posted Land Price this year. Even in Tokyo, where there were no areas where the Posted Land Price increased last year, in some areas the prices have started to increase this year. The noticeable price increases in the greater Tokyo area appeared around the Musashi-Kosugi Station area in Kawasaki city where tower apartment sales have been active; as well as in the Toyosu Station area where apartment sales have been going well.
In addition to the “Abenomics” effects, the consumption tax increases scheduled on April 2014 and October 2015 are also urging individuals to real estate investments, which seems to have resulted in the increase of the Posted Land Price. Furthermore, commercial property transactions obtained by J-REITs increased significantly. The posted sum of asset acquisitions by J-REITs just between January and February this year has already reached 500 billion yen, which is already half of the total transactions from last year; which was 1 trillion yen. The increase in incoming foreign currencies and active domestic investments suggest further increase in the land price.
While the Abenomics effect is attracting a lot of attention in the real estate market, PLAZA HOMES was interviewed by a Japanese TV crew regarding the recent trends of foreign investors. “TV Asahi Morning Bird”
PLAZA HOMES, LTD. Sales & Rentals Dept. Sales and purchases Section Kubo
“Since the beginning of this year, in response to the yen depreciation and rising stock prices, I have responded to an increase of inquiries from Asian, European and American investors. We received many inquiries about houses and apartments in the popular areas such as Minami-Aoyama, Akasaka, Azabu, Ebisu, Shirokane and Hiroo.”
It is predicted that the real estate market will continue to remain active for a while as domestic demand increases in response to the scheduled consumption tax increases and also foreign investment increase due to the impact of Abenomics and yen depreciation.