Japanese land falls

The price of land in Japan had dropped considerably as the recession discouraged investors and developers found funding cut off by a tighter credit regime...

It is the biggest decline in five years with average priced falling 4.4per cent in the 12 months to the end of June and also marks the 18th consecutive annual decline, according to figures from the Ministry of Land, Infrastructure, Transport and Tourism.

The report looked at prices in 22,435 locations and all but three experienced a decline.

But there is hope that the worst is over as Japan emerges from its deepest postwar recession.

Property experts point to the fact that an 18 month climb in Tokyo office vacancies ended last month and the number of unsold condominiums on the market are down 43per cent since December.
 
‘There are signs the decline in land prices in Tokyo and other big cities is coming to a halt.

It is possible Tokyo prices could even rise next year but the regional districts will continue to see decline,' said Takashi Ishizawa, a Tokyo based real estate analyst at Mizuho Financial Group.

He also pointed out that price declines in Japan have been less severe than in other markets that had rallied in recent years.
 
Overall the official figures show that the value of commercial property in Japan dropped 5.9per cent from a year earlier.

This is good in comparison with the US, for example, where commerical real estate fell 27per cent in the same period.
 
Although prices in residential and commercial districts fell in all of Japan's 47 prefectures, the first time since the ministry began compiling the data in 1975, values in Tokyo, Osaka and Nagoya, the three major metropolitan areas, declined 6.1per cent while prices in rural districts dropped 3.8per cent.

But the property industry has been badly bruised with developers and managers accounting for eight of the 10 biggest bankruptcies of listed Japanese companies this year, stoking consumer concern about job security and deterring banks from refinancing loans to the industry.

Source: www.propertywire.com