Official Land Prices of Japan in 2020 – Tokyo’s price rise sees increase in Commercial Areas and slight decrease in Residential Areas
On March 18, 2020, the Ministry of Land, Infrastructure, Transport, and Tourism announced the official land prices as of January 1, 2020. The data for 2020 shows a 1.4% nationwide increase in the fluctuation of the average prices for all types of land zoning and has also resulted in a 5 year consecutive increase. The current trend shows that an increase in foreign visitors and redevelopment projects in the cities has contributed to a 3.1% rise from 2019 (2.8% rise in 2019 from 2018) and is the 5th consecutive year that the national average land price for “commercial areas” has risen. Another trend shows that the 0.8% rise from 2019 (0.6% rise in 2019 from 2018) and the 4-year consecutive rise in the national average land price for “residential areas”, can be attributed to actual market demands that are supported by a steady labor market and government-led ultra-low interest rates. However, it has been observed that the sustainability of such rises in land prices is being tested as the headwind against the market caused by the spread of the new coronavirus becomes intensified.
The 2020 average land price for Tokyo has seen a 4.3% price increase from 2019 for all types of zoning. The 2019 price increase from 2018 was 4.2%. The land price, along with the rate of increase, has continued to grow for 7 consecutive years.
The average fluctuation in the land price for Tokyo's Commercial areas has increased by 7.2%. This is an increase of 0.4% more than 2019’s increase from the previous year of 6.8%. The average increase rate across the 23 wards is 8.5% in 2020, which is a 0.6% increase from 7.9%, the same increase rate in 2019 from 2018, and has also resulted in 7 years consecutive increase. The highest rate of increase that was seen is 14.9% in Taito-ku (11.0% in 2019), followed by 10.4% in Kita-ku (9.0% in 2019), 10.1% in Minato-ku (8.8% in 2019), and in Arakawa-ku (9.4% in 2019).
The current trend in the land price rise of commercial areas in the 23 wards shows that:
- Inbound foreign travelers’ demands are continuously high
- Store’s rents have been rising, office vacancy rates in Central Tokyo have been low, and all the rents have been in the rising trend.
- Rebuilding and redevelopment projects, mostly in Central Tokyo, are progressing, which has become a factor in the rise in land prices for each local area.
This year’s official land price ranking for commercial properties (shown below) shows that all of the top 10 highest price points in Japan are properties located within Tokyo. This year Ginza, in Chuo-ku, is in possession of 6 of the top 10 spots, including the top 4 spots on the highest land price list, with its Yamano Music Ginza Main Store taking first place. However, it has been observed that the increase rates for the top 4 spots have been almost flat when compared with the previous year as most of the redevelopment works in Ginza area have completed.
The 2020 price increase for Residential areas was 2.8% which is a 0.1% decrease from the 2.9% increase in price of the previous year (2018-2019). The average land price increase in the 23 wards was 4.6%, which is a 0.2% decrease from the 4.8% increase in 2019. This marks 2020 as the 7th consecutive year that the average land price rate in Tokyo's 23 wards has increased. The highest rate of average increase within the 23 wards–when compared with the previous year (2019)–was 8.8% in Arakawa-ku (8.6% in 2019), followed by 7.5% in Toshima-ku (7.0% in 2019), and 7.3% in Bunkyo-ku (7.0% in 2019). This result takes into consideration that housing in the suburban wards are less expensive than in Central Tokyo, but the areas are becoming more convenient for transportation than they were in the past. In addition, as the employment situation continues to improve and the low interest rate remains unchanged, the actual consumer demands to acquire housing are continuously strong.
The 2020 official land price ranking for residential properties (shown below) shows that 5 of the highest land prices in Japan are within Tokyo’s borders. The most expensive place is “1-14-11, Akasaka” in Minato-ku at 4.72 million yen per 1 square meter, making it the highest land price point–for the 3rd consecutive year–with its high increase rate of 8.8% from 2019. In the Akasaka area, various redevelopment projects have been carried out one after another to meet the increasing demands for apartments from a more affluent populace that prefer to live there, such as IT company owners and people working in the entertainment business. Minato-ku occupies 4 spots on the 2020 top 5 highest land price ranking in Japan.
2020 Official Land Price Ranking by Property Nationwide
(Commercial Properties)
| Ranking | (all 10 are in Tokyo) | JPY/sq.m | Fluctuation (% from 2019) |
|---|---|---|---|
| 1 | 4-5-6, Ginza, Chuo-ku (Main store of Yamano Music Co.) |
57,700,000 | 0.9 |
| 2 | 5-4-3, Ginza, Chuo-ku (Taikakukan Building) |
49,700,000 | 1.2 |
| 3 | 2-6-7, Ginza, Chuo-ku (Meidi-ya Ginza Building) |
43,300,000 | 1.6 |
| 4 | 7-9-19, Ginza, Chuo-ku (ZARA) |
42,700,000 | 1.7 |
| 5 | 3-24-1, Shinjuku, Shinjuku-ku (Shinjuku M-Square) |
37.900,000 | 5.3 |
| 6 | 2-4-1, Marunouchi, Chiyoda-ku (Marunouchi Building) |
37,600,000 | 2.2 |
| 7 | 3-30-11, Shinjuku, Shinjuku-ku (Shinjuku Takano Building No.2) |
36,800,000 | 4.5 |
| 8 | 6-8-3, Ginza, Chuo-ku (Ginza Owaricho TOWER) |
32,200,000 | 3.2 |
| 9 | 4-2-15, Ginza, Chuo-ku (Tsukamoto Soyama Building) |
31,000,000 | 5.1 |
| 10 | 2-2-1, Otemachi, Chiyoda-ku (Shin-Otemachi Building) |
29,400,000 | 3.2 |
2020 Official Land Price Ranking by Property Nationwide
(Residential Properties)
| Ranking | (all 5 are in Tokyo) | JPY/sq.m | Fluctuation (%from2019) |
|---|---|---|---|
| 1 | 1-14-11, Akasaka, Minato-ku | 4,720,000 | 8.8 |
| 2 | 6-1, Rokubancho, Chiyoda-ku | 4,050,000 | 3.1 |
| 3 | 3-16-10, Shirokanedai, Minato-ku | 3,810,000 | 7.0 |
| 4 | 4-9-34, Minami-Azabu, Minato-ku | 3,500,000 | 8.4 |
| 5 | 1-5-11, Minami-Azabu, Minato-ku | 3,170,000 | 6.0 |
(Source: 2020/03/19 NIKKEI Newspaper)
What is Official Land Price?
Based on the Public Notice of Land Prices Act, the Land Appraisal Committee of the Ministry of Land, Infrastructure, Transport and Tourism selects the points of land, evaluates the price of each point of land as of January 1st every year, and announce it as a benchmark price for land transactions. The total selected points of land in Tokyo as of year 2020 are 2,602 points; the number of points per each purpose are 1,705 points for residential areas, 850 points for commercial areas, and 39 points for industrial areas, 8 points for forest lands, respectively.
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