Japan s land prices start to rise

Tokyo’s Imperial Palace was valued higher than California in the 1980s

Japan’s land prices have risen for the first time in 16 years, in a further sign that the world’s second-largest economy is continuing to recover.Since 1990, land prices have been sliding following the bursting of the asset price bubble.

However, government figures showed that nationwide land prices rose by 0.1% last year with commercial land prices increasing by 2.3%.

Strong price increases in commercial areas in major cities drove the gains.

1990s peak

The major metropolitan areas of Tokyo, Nagoya and Osaka each saw significant increases.

Commercial land prices in these big cities rose by 8.9% on average, led by a 9.4% average rise in Tokyo.

“The rise was definitely positive for the economy because it will eventually help boost consumption,” said Bank of America economist Tomoko Fujii.

The Japanese property bubble burst following rises in interest rates in the early 1990s.

Non-residential property prices slid by as much as 20% in 1993 and continued to decline throughout the 1990s.

A price survey by the National Tax Agency showed Japan’s property prices began to recover in 2005.

Japan’s residential land prices are still on average half of what they were at their 1990 peak, the survey showed.