Commercial land prices in Japan grew for the first time in eight years, driven by increase in foreign tourism and the Bank of Japan's easing of monetary policies, among other factors.
The Business Times reported that the annual survey by the Ministry of Land, Infrastructure, Transport and Tourism showed a 0.9 percent increase in 2015 in commercial land prices nationwide following a flat growth the year earlier. Nikkei Asian Review noted that the last upward trend in Japan's real estate market was derailed by the global financial turmoil.
One of the main factors driving Japan real estate investment is the growth in foreign tourism brought about by weak yen currency along with government initiatives. Last year, the country saw a record number of foreign visitors at 19 million. This number prompts an expected growth in hotels and retail shops.
The Business Times also reported that based on the government's survey, four core cities in Japan recorded a 5.7 percent increase in commercial land prices from 2.7 percent in 2014. Meanwhile, from 1.8 percent in the prior year, prices rose to 2.9 percent in 2015 in three biggest metropolitan areas in the country. One of the busiest shopping areas in Tokyo, the Ginza district, saw as much as 10-20 percent jump in property prices. Japan experienced a market bubble in 1987 when property prices rose to as fast as 21.9 percent.
Meanwhile, according to a report from Nikkei Asian Review, real estate investment in Japan was also boosted by the BOJ's negative interest rate policy that was introduced in late January. The low interest rates drove investors to put more money in the property market as the policy allowed real estate investment trusts to borrow money from banks and issue bonds to raise funds. Properties near Tokyo Station surged to around 7 percent, while land prices in the suburbs also increased as more outlet malls and commercial buildings are being constructed.
