Standard Land Price for Tokyo in 2019 sees a 7 year consecutive increase
On September 19th, the Ministry of Land, Infrastructure, Transport and Tourism announced the standard land prices for their selected points nationwide. On the same day, the Tokyo Metropolitan Government also announced the land prices of their selected locations in Tokyo. The standard land price (*later explained in more detail) refers to the price of land per 1 square meter for selected locations as of the 1st of July each year.
The average increase in price for land (for all usages) in Tokyo has increased by 4.1% from last year (2018). This year is the 7th consecutive year the land it has increased. This year's increase (2019) is 0.4% higher than the previous year’s increase (2018).
For Commercial Areas, the average increase is 6.8%. This increase is mostly based on a significant price increase in the areas attracting foreign visitors, such as Asakusa and Taito-ku. In these areas, the construction of new hotels is currently planned. In the areas of Toranomon and Minato-ku, large scale redevelopment work is on-going. Since last year, in Residential Areas, the price rise trend has continued to spread out into the suburban wards.
The average price in Tokyo has risen by 6.8%, making this year’s (2019) price increase 0.9% higher than last year’s (2018). This year’s average price increase within the 23 wards of Tokyo is 8.4%, which is 1.2% higher than last year’s (2018) 7.2% increase from the year before (2017).
The highest price increase to be recorded this year was an increase of 34.5% for 1-chome, Asakusa, Taito-ku. The 2nd highest increase recorded this year was an increase of 31.1% for 2-chome, Nishi-Asakusa, showing an increase of the Asakusa area in Taito-ku is outstanding. According to the Tokyo Metropolitan Government, this is the first time in 12 years (since 2007) that the increase has gone over 30% in Tokyo. It has been observed that the increase can attributed to a strong demand in the sale of goods and lodging due to many foreign tourists, and from the on-going construction of new hotels within the area. The 3rd to 5th highest increases recorded this year are attributed to ongoing redevelopment such as the large-scale renovation of the Shinjuku Sumitomo Building in Nishi-Shinjuku as well as large-scale redevelopment in the Toranomon-Azabudai area and the area around Shibuya Station.
The highest price point–remaining unchanged from the previous year–is the Meijiya Ginza Building at 2-6-7, Ginza, Chuo-ku. The price, 43,200,000Yen per square meter (41,900,000Yen in 2018) is a 3 year consecutive record high price. This 3 year consecutive record high price has surpassed its previous peak price during the bubble economy back in 1991 (38,000,000Yen).
The price increase average within Tokyo is 2.5%, which is a 0.1% increase from the previous year (2018). The results from this year’s survey shows that 3 of central Tokyo’s wards (Chiyoda, Chuo, and Minato) have dropped out of the Top 10 ranking of average price increases in Tokyo this year. It also shows that the land prices within Central Tokyo have just about peaked as the increase in prices is continuing to slow down. In contrast, in the outskirts of Tokyo, where there is convenient transportation access, land prices are expected to continue increasing.
The average standard land price for Residential Areas in Tokyo has continued to increase for the past 7 consecutive years. However, there is variation in the rate at which some of the residential area’s land prices are increasing. The increase in the average price for all wards has gone up from 4.3% to 4.6%. The highest increase in price for residential areas this year was 8.6% in Arakawa-ku (8.7% in 2018), followed by 7.9% in Toshima-ku, and 7.6% in Taito-ku.
In Central Tokyo the price of condos has almost plateaued, indicating that the inflation of land price is slowing down. In the suburbs, with convenient transportation access, the land price has shown further inflation. As a result of there being more inflation of the land price in the suburbs, no piece of land in the central wards has made it into the Top 10 price rise ranking this year. However it should be noted that 5 central wards have seen a 5.2% average increase in land price inflation (from 2018). Other wards have seen 4.5% the same average increase.
One of noteworthy point about this year’s standard land prices (as of July 1st) announced by the Ministry of Land, Infrastructure and Transport, is that the national land price average for all types of land usage have shown a rise of 0.4% (from 2018), which is the 2nd consecutive year it has risen (It rose for the first time in 27 years last year). Another point is that the land price average for commercial areas in provincial areas have shown a 0.3% rise, which is the first rise in 28 years since the year 1991.
It has been observed that 2 major factors have contributed to the upward trend in land prices. One of them is that major urban areas that attract many foreign tourists and have active demands in redevelopment, are contributing to the rise. The second is that the Japanese government has maintained an ultra-low interest policy to support the investment of institutional investors and the business companies, contributing to the land price rise in the commercial areas nationwide and also contributing to house acquisition and the recovery of the land price rise in the residential areas nationwide.
About the residential area in Tokyo, it has been observed that more and more home buyers are paying attention to cost-effectiveness comparisons. The areas which have shown the highest rise of land prices are those in the suburban wards. These areas are convenient for transportation but have relatively low land prices. Looking over Tokyo’s 23 wards, the most significant increase in land price can be seen in the suburban wards of Arakawa-ku, Toshima-ku, and Taito-ku.
Ranking by Amount of Price Increase Top 5 points
The land price rise in Asakusa’s Commercial Areas stand out amongst the other wards. Residential areas in the suburban wards are continuously rising in price.
|Address of Price Point||Price (1000Yen/㎡)||Fluctuation (％)|
|Commercial Area||1-29-6, Asakusa, Taito-ku||2,220||34.5|
|2-6-1, Nishi-Shinjuku, Shinjuku-ku||12,700||19.8|
|1-16-8, Toranomon, Minato-ku||4,180||18.1|
|2-29-19, Dogenzaka, Shibuya-ku||15,300||17.7|
|Residential Area||1-36-11, Takada, Toshima-ku||643||10.9|
|16-43, Senju-nakaicho, Adachi-ku||416||9.5|
|2-21-2, Arakawa, Arakawa-ku||498||9.5|
|1-24-3, Kita-Otsuka, Toshima-ku||667||9.3|
|1-3-17, Ariake, Koto-ku||654||9.0|
(Source for data: Bureau of Finance *Round off to one decimal place）
*What is the Standard Land Price?
The standard land price is the price of land per 1 square meter and is calculated for each selected point of land as of the 1st of July each year. The Prefectural Governments are responsible for its survey and the Ministry of Land, Infrastructure, Transport and Tourism release the nationwide results. It is one of the two major representative data that shows the fluctuation of land price along with the official land price that is announced on Jan.1 every year.
* Reference source: Sept., 20th, 2019 Nihon Keizai Shimbun