Japan's land prices rose for a second straight year at the fastest pace since 2008, a government survey showed on Wednesday, spurred by signs of economic recovery after the coronavirus crisis.
Average land prices grew 1.6% in 2022, outstripping the previous year's gain of 0.6%, with the trend spreading to the countryside, the survey by the land ministry showed. It was the fastest pace of increase since a 1.7% in 2008.
Demand for housing in urban areas was solid, partly because of low interest rates, while a shift to working from home helped land prices in the suburbs. Demand for offices and condominium sites boosted a recovery in commercial prices.
"The recovery trend in land prices towards the pre-COVID level has become more remarkable, as prices in urban areas continued to grow and expanded to rural areas as well," said the ministry, which surveyed about 26,000 locations.
Residential land prices rose 1.4% for the year, the fastest pace since 1991 and overtaking a 2021 rise of 0.5%, helped by low interest rates and a government tax break for housing, according to the survey, whose results will provide a basis for land transactions.
Japan's commercial land prices gained 1.8%, versus growth of 0.4% the previous year, led by solid demand for shops and offices, the survey showed. The return of domestic travellers to tourist destinations helped the recovery.
Expectations for a return of foreign visitors also supported commercial land prices in some popular tourist spots such as Osaka and the ancient capital of Kyoto, after the easing of COVID-19 border curbs.
Commercial land prices rose for the second successive year in metropolitan areas around the capital, Tokyo, and Nagoya, while those in Osaka grew for the first time in three years.
Average land prices in the four major regional cities of Sapporo, Sendai, Hiroshima and Fukuoka advanced 8.5%, up for the 10th straight year, partly led by redevelopment projects. Residential land prices in other regional areas rose for the first time in 28 years.
Land prices in industrial areas rose 3.1%, up for a seventh straight year and at the fastest pace of rise since 1991, as burgeoning e-commerce drives demand for sites suitable for large logistics facilities with good access, the survey found. (Reporting by Kaori Kaneko; Editing by Clarence Fernandez)