Land prices in Tokyo rose in 2005 for the first time in 15 years as Japan's steady economic recovery led to a pick-up in demand, a government survey showed today.
Although nationwide prices slid for the 15th straight year and stood at one-third of their early-1990s peaks, the pace of decline in both residential and commercial land prices slowed in the year through January 1st, the survey showed.
In Tokyo, residential land prices rose 0.8 per cent, while commercial land prices increased 2.9 per cent.
Reflecting a healthy recovery in the economy, which expanded 2.7 per cent in calendar 2005, strong corporate demand for real estate investment and capital spending pushed up commercial land prices in the nation's three major metropolitan areas - greater Tokyo, Osaka, and Nagoya - for the first time in 15 years.
On average, however, nationwide residential land prices and commercial land prices both fell 2.7 per cent in 2005.
Since the bursting of the late 1980s "bubble economy", land prices in Japan have fallen sharply. The index of commercial land prices in Japan still only stood at about 30 compared with its 1991 peak of 100.
Japan's residential land prices on average are still half of what they were in 1991, and those in greater Tokyo - home to about one-fourth of the total population - were about 41 per cent of their 1991 levels.
Residential land prices in greater Tokyo have been boosted by consumer demand for condominiums, and traditionally upscale residential areas continue to attract those who seek better living environment, pushing up property prices in some areas by more than 20 per cent.