Is it time to buy? By region, the greatest drop in residential property values occurred in Tokyo, with a 6.5 percent decline. A survey revealed that the prices are declining in nearly half of the residential areas in the Tokyo metropolitan areas. Use the BT search for real estate to get additional information on living in japan.
Land values have dropped across Japan in the past year according to statistics released by the Ministry of Land, Infrastructure, Transport and Tourism on Monday.
Residential property values on Jan. 1, 2009 were down 3.2 percent from a year earlier, while commercial property was down 4.7 percent, the first such declines in three years. Of the 24,157 areas used for comparison, 23,435 had declined in value since the beginning of 2008. Only 21 areas experienced an increase.
The decline in average Japanese property values began in the second half of 2008 with the subprime loan problem in the United States, and sped up with the worldwide spread of the financial crisis and declining economic fortunes. The decline in property values was further exacerbated by the downturn in Japan’s condominium market and the decline in real estate financing from private investors and financial institutions.
The average drop in Japan’s three largest urban areas for residential and commercial properties stood at 3.5 percent and 5.4 percent respectively. Residential values had not dropped in three years, and commercial properties in four.
The Tokyo area saw a sudden reversal from the previous year’s sharp increases in value, while the Nagoya area, which has been hit hard by the crisis in the auto industry, witnessed a steep decline in commercial property values. Values in areas beyond the three largest cities declined for the 17th year in a row, though the scale of the decline was the greatest in five years.
By region, the greatest drop in residential property values occurred in Tokyo, with a 6.5 percent decline, followed by Fukui Prefecture at 5.5 percent. The largest drops in commercial property values were in Akita Prefecture at 8.2 percent, Miyagi Prefecture at 8.1 percent and Tokyo at 7.5 percent.
The largest drop in value of a single residential area occurred in Oyama-cho in Tokyo’s Shibuya Ward, where there was an 18.3 percent decline. Meanwhile the Sakae area of Nagoya’s Naka Ward witnessed the largest fall in commercial land values, with a 28.4 percent decline. The most severe drops in residential property values were concentrated in central Tokyo, while 9 out of the 10 areas to experience the most pronounced declines in commercial property values were in Nagoya. The 21 locales to experience land value increases were all undergoing train station area land readjustments or other projects.
The highest residential land value in Japan was in the Gobancho area of Tokyo’s Chiyoda Ward, priced at 3.27 million yen per square meter. The most highly valued commercial land was in Tokyo’s Ginza area, where one property was priced at 38.2 million yen per square meter.
According to a survey on going prices (as of Jan. 1, 2008) announced by Nomura Real Estate Urban Net on Jan. 18, 2008, land prices dropped in 49.6% or nearly one half of the 125 housing districts (survey spots) in the Tokyo metropolitan area. The percentage represented a sharp rise from the 16.0% in the previous survey conducted in October 2007. The fluctuation rate of the “land prices in housing areas” in the metropolitan area in the Oct.-Dec. 2007 quarter went down 2.1% on the average against the previous quarter. The decrease rate was 0.1% in the previous survey (July-Sept. 2007), and this is why the survey spots where the priced dropped expanded. Office buildings and apartment houses in the Tokyo wards of Chiyoda, Minato, Chuo, Shinjuku, Shibuya, Toshima, Bunkyo and Daito are on a declining trend, and the central part of Tokyo is sharply declining.