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According to the National Tax Agency, land prices in Japan increased for the second year in a row in 2022, indicating a gradual rebound from the pandemic’s effects as restrictions were lifted. A survey conducted by the agency revealed that average land prices rose by 1.5% last year, following a 0.5% increase in 2021. In 2020, the property market experienced a downturn due to the pandemic, resulting in the first decline in land prices in six years, as the crisis negatively impacted the demand for offices and hotels.
The survey indicated that as the economic recovery extended beyond urban areas, average land prices increased in 25 out of the 47 prefectures across Japan, an improvement from the previous year’s 20 prefectures. Hokkaido, located in the northern part of Japan, experienced the largest growth with a rise of 6.8%. This increase was primarily driven by the demand for both commercial and residential land in Sapporo city, the capital of Hokkaido, and its surrounding region.
Last year, land prices decreased in twenty prefectures, which was a decrease compared to twenty-seven prefectures in 2021. Prices remained unchanged in two prefectures. In Tokyo, specifically in the upscale Ginza shopping district, the most expensive area in Japan, land prices increased by 1.1% in 2022, reaching 42.7 million yen ($295,440) per square meter. This marks the first rise in prices in three years. The optimism surrounding the revival of inbound tourism contributed to the upward trend in prices. Ginza maintained its position as the highest-priced location in the country for the 38th consecutive year, as reported in the survey.
During the pandemic, tourism to Japan came to a near standstill for over two years. However, the number of visitors has been gradually rebounding since the government reintroduced visa-free travel for numerous countries in late 2022. The tax agency evaluates land prices annually as of January 1st to determine inheritance and gift taxes on properties acquired within that year. The survey encompassed more than 320,000 plots.
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