Japan's Land Prices Surge at Fastest Rate in Over Three Decades
Japan experienced its most rapid land price growth in 34 years during 2024, with property values increasing throughout the country as sustained economic growth extended beyond major urban centers into regional areas, according to a government survey released Tuesday.
3/23/20252 min read
The land ministry survey revealed average nationwide land prices across residential and commercial properties rose by 2.7% as of January 1, marking the fourth consecutive year of growth. This represents the fastest appreciation rate since 1991, before Japan's asset bubble burst and triggered a prolonged decline in property values.
"Japan's overall land prices continued its rising trend amid a moderate economic recovery," the land ministry stated in its report.
The resurgence in inbound tourism has significantly contributed to the upward trend, stimulating demand for hotels and retail spaces. Approximately 64% of surveyed plots now exceed their pre-pandemic 2020 values.
However, the survey identified potential concerns about future market stability, particularly regarding escalating construction costs and the possibility of additional interest rate hikes by the Bank of Japan. The central bank raised borrowing costs in July 2023 after abandoning its long-standing aggressive monetary stimulus program, which had been implemented to stimulate sluggish consumer spending. A further rate increase to 0.5% followed in January 2025, with signals that tightening may continue if wage growth persists.
"Some have voiced concern about the outlook due to higher construction costs and expectations of higher interest rates," noted a land ministry official.
Both residential and commercial property prices have now grown for four straight years. Residential land values increased by 2.1%, driven by sustained housing demand in the low interest rate environment. Areas with superior transportation links proved particularly attractive to buyers, while resort and tourist regions saw strong demand for both foreign-targeted condominiums and local housing.
Commercial land prices rose 3.9%, with popular tourist destinations like Kyoto and Osaka experiencing continued appreciation as Japan welcomed record numbers of foreign visitors in 2024. Areas undergoing redevelopment projects also saw persistent growth in property values.
Locations housing semiconductor facilities, such as Chitose in Hokkaido and Kikuyo in Kumamoto Prefecture, experienced land price increases due to robust demand for housing and office space.
Industrial areas recorded a 4.8% rise in land prices, marking the ninth consecutive year of growth, bolstered by the development of large-scale logistics facilities serving the e-commerce market.
Japan's three major metropolitan regions surrounding Tokyo, Osaka, and Nagoya saw land prices climb 4.3%, increasing for the fourth consecutive year. Meanwhile, the four major regional cities of Sapporo, Sendai, Hiroshima, and Fukuoka experienced a 5.8% rise, continuing twelve years of growth, though at a slower pace than in 2023 due to rising construction costs.