Section 2   Features of, and Reasons for, Land Price Trends in the Metropolitan Areas Shown in Published Land Prices in 2001 In relation to land price trends in Japan for the year 2000, based on the results of published land prices in 2001, prices of lands for residential properties declined by 4.2% on the previous year (the decrease was 4.1% in the previous year for the same period) and prices of lands for commercial properties declined by 7.5% on the previous year (the decrease was 8.0% in the previous year). The following features stand out when focusing on the metropolitan areas (see Chart 4-2-1). (1) With regard to lands for residential properties, both in the Tokyo area and in the Nagoya area, the extent of the decline in land prices diminished in most areas. However, in the Osaka area the extent of the decline increased in nearly all areas. In the Central Wards Area in Tokyo, land prices decreased by 1.6%, nearly leveling off in this year, after a decrease of 3.2% in the previous year. In Minato Ward, Shinjuku Ward and Shibuya Ward, points of land emerged where published land prices increased for the first time in the last 10 years. Also, in the center of Nagoya City, points of land emerged where published land prices increased. On the other hand, in the Central Six Wards in Osaka City, the extent of land price decline fell from a decrease of 6.7% in the previous year to 5.2% this year, but generally the extent of land price decline increased. (2) With regard to lands for commercial properties, the extent of the decline in land prices diminished in most areas. In the Central Wards Area in Tokyo, such as Shinyku Ward and Minato Ward, in the part of dense commercial areas and with increased traffic accessibility, the number of points of lands at which places where land prices increased and leveled off, itself increased. In Nagoya City, points of land emerged where published land prices increased in the portions of dense commercial areas for the first time in the last 10 years. On the other hand, in the Central Six Wards in Osaka City, although the extent of land price decline fell from a decrease of 17.7% in the previous year to 15.6% this year, the land price decrease was still at a high level. The basic background of land price trends is that the land and property market is in the process of a structural change to a market that is based mainly on actual demand. It is notable that land prices are divided into two different types based on the differences in the convenience and profitability of land. The factors which caused the above features in each category of land are as follows: (1) With regard to land for residential properties, the factors are: a) In the central areas, population trends involve people returning to central areas for the convenience of transport and other conveniences of daily life, including the proximity to office space b) Demand for residential properties, mainly for condominium apartments, continued to be steady, encouraged by the perception by potential purchasers of reasonable prices caused by the recent land price declines along with the introduction of tax reductions on housing loans. c) On the other hand, in the suburbs, such as in remote areas for commuting to work, demand continues to be weak because of the relatively high prices. Also, in the suburbs the supply and demand for residential properties is affected by the differences of incomes, economic trends, and the environment for employment between areas. (2) With regard to lands for commercial properties, the factors are: a) In the central areas, the demand for office space and retail space is being realized with gradual improvements in the economic position, mainly through an increase in corporate profitability and investment. b) In some areas, due to the delay in regional economic recovery and lower consumption, demand for office and retail space has continued to be weak. Such conditions are reflected in the trends in land prices. Chart 4-2-1  Comparison of Land Price Trends in the Metropolitan Areas Lands for residential properties   Previous (published in 2000) Current (published in 2001) Extent of land price decline increased 14/27 11/27 Same level of land price decline 0/27 1/27 Extent of land price decline diminished 13/27 15/27 Lands for commercial properties   Previous (published in 2000) Current (published in 2001) Extent of land price decline increased 10/27 5/27 Same level of land price decline 1/27 1/27 Extent of land price decline diminished 16/27 21/27 <Way of counting areas> To count the number of areas belonging to each category for the purposes of the change in the ratios, the areas in the three metropolitan areas that were counted as one area were as follows: Tokyo area: 12 areas (Tokyo Prefecture) Central Wards Area, South West Wards Area, North East Wards Area, Tama area (Kanagawa Prefecture) Yokohama City, Kawasaki City, Other Areas (Saitama Prefecture) Near Tokyo Area, Other Areas (Chiba Prefecture) Near Tokyo Area, Other Areas Ibaraki Prefecture Osaka area: 9 areas (Osaka Prefecture) Osaka City, North Osaka, East Osaka, South Osaka (Hyogo Prefectures) Kobe City, Hanshin Area (Kyoto Prefecture) Kyoto City, Other Areas Nara Prefecture Nagoya area: 6 areas (Aichi Prefecture) Nagoya City, Near Nagoya Area, Owari Area, Nishi Mikawa Area, Chita Area. Mie Prefecture Total 27 areas Source:  "Published Land Prices" by Ministry of Land, Infrastructure and Transport | Back to Ministry of Land, Infrastructure and Transport Home Page | Back to Land and Real Property in Japan | | Contents | All Rights Reserved, Copyright (C) 2001, Ministry of Land, Infrastructure and Transport