All down

The land ministry released its most recent statistics for land prices nationwide yesterday and it was all down. Average value for commercial properties dropped 5.9 percent from last year and for residential land the drop was 4 percent. It was the second year in a row commercial property dipped and the 18th year in a row for residential properties.

However, the main news was the drop in land values in the three metropolitan areas of Tokyo, Nagoya, and Osaka. In those three areas, business land prices declined 8.2 percent and commercial prices 5.6 percent, the first drop in four years. Property investment in the big cities has enjoyed a “mini-bubble” lately thanks to foreign companies buying up land and buildings, but since the “Lehman shock” last year most of this foreign money has retreated. In Tokyo, the decline in land values was 8.9 percent.

Some economists believe prices have bottomed out while more pessimistic parties believe they will go lower. Evidence to support the former view is that the vacancy rate in Tokyo has stopped going down and condo sales are improving slightly. Contract closing for new condos has stayed at about 70 percent since the spring.

Of course, outside the cities, things are just getting worse simply because nothing can stop the exodus from rural areas to urban areas.

The way it is

The Asahi Shimbun just published statistics from the Ministry of Internal Affairs and Communications regarding Japanese housing. The ministry surveys the housing situation every five years and found that as of October last year there was a total of 57.59 million residences in Japan, 7.56 million–or 13.1 percent–of which were vacant. Read More

New leases on life

According to the website of the housing newsletter Jutaku Shinpo, during FY 2008 88.5 percent of the rental properties in Japan were occupied. Moreover, during that time 91.6 percent of these properties decreased their rents. Perhaps this astonishing statistic should be taken with a grain of salt since the newsletter’s survey, which was conducted among rental property management companies, only had a 26 percent response rate. Nevertheless, it’s startling. Read More

Hot stats

Japan’s Real Estate Finance Research Laboratory just released its latest batch of figures for condo starts in Japan. As of the end of March, 463 high-rise condominium buildings are under construction throughout the country. That means buildings of at least 20 stories. These buildings comprise 143,826 units. Of these, 153 will be completed before the end of 2009. Read More