Commercial land prices in Japan's 3 major areas rise at fastest since 2008

[TOKYO] Commercial land prices in Japan's three major metropolitan areas grew at the fastest pace since 2008 as of July 1 this year from a year ago, boosted by real estate investment, a government survey showed on Tuesday in a rare bit of good news for the ailing economy.

Nationwide commercial land prices stopped falling in the period for the first time since 2007, according to the Ministry of Land, Infrastructure, Transport and Tourism.

"Demand for retail spaces and accommodations has risen due to an increase in foreign tourists," the ministry said.

"The vacancy rate of offices has fallen in major cities, which helped to boost profits."

Commercial land prices in three major metropolitan areas of Tokyo, Osaka and Nagoya rose 2.9 per cent, up for a fourth straight year and the fastest pace since 2008, when they rose 3.3 per cent, the survey showed.

Overall commercial land prices in Japan were flat from a year earlier, the first time they escaped declines since 2007, when they rose one per cent.

Nationwide prices of residential land fell 0.8 per cent for the year and overall land prices in Japan slipped 0.6 per cent, but both marked their smallest decline since 2007.

"Prices for residential land stayed solid helped by low interest rates and tax breaks for housing loans," the ministry said.

The pace of overall land price declines in regional cities also slowed, and commercial land prices in four regional hubs - Sapporo, Sendai, Hiroshima and Fukuoka - rose 6.7 per cent, up for a fourth straight years and the fastest gain since 2007.

The increase was due to more people moving into those areas, resulting in higher demand for transportation infrastructure and redevelopment, the ministry said.

REUTERS