Land Prices Continue to Climb as Demand Shifts to Japan's Suburbs

TOKYO, Jul 01 (News On Japan) - Japan’s land values have risen nationwide for the fourth consecutive year, with the National Tax Agency releasing new roadside land prices on July 1st that show a continued upward trend driven by suburbanization and redevelopment.

While high-end districts like Ginza retained their top rankings in absolute value—with Ginza's Kyukyodo location reaching 4.808 million yen per square meter—an unexpected shift has occurred in less central areas, such as Kitasenju in Tokyo, which rose 26% year-on-year, placing second in the city after Asakusa.

This increase is fueled by ongoing redevelopment, improved access to central Tokyo, and a growing population supported by new housing projects and university outreach. The term “suburbanization” has become the key trend according to real estate analysts, as more people are seeking condominiums and even luxury apartments in regional cities, leading to the rise of so-called “local million-yen condos.”

Other high-growth areas include Nagano’s Hakuba and Hokkaido’s Furano, which saw year-on-year land value increases of over 30%, driven by foreign demand for vacation homes and ski resorts. The Ministry of Land, Infrastructure, Transport and Tourism notes that redevelopment, inbound tourism, and lifestyle changes since the pandemic are reshaping demand for land nationwide. At the same time, some municipalities—such as Wajima in Ishikawa and several towns in Hokkaido and Fukushima—have seen land prices decline due to population loss, limited redevelopment, or ongoing disaster recovery.

The rise in land prices has also raised concerns about inheritance taxes. The average inheritance tax per deceased person in 2023 was reported at 19.3 million yen, a substantial sum that typically must be split among family members. While this figure appears to correlate with the rise in land values, tax professionals warn that the relationship is not one-to-one. A 30% increase in rosenka does not mean a 30% increase in taxes because every plot of land differs in shape, usability, and location. These factors influence actual valuation for tax purposes, and experts recommend consulting professionals when estimating future liabilities.

Overall, the upward trend in land prices reflects Japan’s evolving real estate landscape, where suburban redevelopment, regional revitalization, and increased tourism are offsetting the long-standing concentration of value in major metropolitan cores. The nationwide average land value rose 2.7% from the previous year, a sign that even as some areas struggle, others are entering a period of renewed growth and investment opportunity.

Source: TBS

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