International | Aug 02 2006
By Chris Shaw (Tokyo)
It may be a far cry from the property boom the Australian and US markets have been enjoying, but Japan has received further good news on the health of its economy after a report revealed average land prices in a selection of major areas rose last year for the first time in 14 years.
Land prices in Tokyo had shown signs of recovery for the last 12 months or so, but the latest figures show the trend has now extended to other major cities such as Osaka, Nagoya and Kyoto as well as prefectures such as Chiba and Aichi. Overall, land prices showed an increase of 0.9%, compared to a fall of 3.4% for the year to January 1, 2005.
While not every region gained, the report from the National Tax Agency showed those regions where prices declined experienced a slowing in the rate of decrease in prices for the second year in succession.
The land prices survey indicates while the economic recovery remains patchy and is centred on the urban regions, it supports the overall trend of an improving economy.
As commentators such as Dennis Gartman of The Gartman Report suggest, the land price gains add to pressure for further increases in interest rates as while the Zero Interest Rate Policy is officially over little action has yet been taken to return rates to more normal levels, especially since inflation appears to be picking up.
For those interested, the most expensive piece of land in Japan is in the upmarket shopping area of Ginza in Tokyo and is valued at 18.72m yen per square metre, which equates to about $220,000 per square metre in Australian dollars.
