Govt should help push up land prices

The Yomiuri Shimbun (Sep. 24, 2010)
Govt should help push up land prices
基準地価 下げ止まりの兆しはあるが(9月23日付・読売社説)

At long last signs have emerged of an end to the fall in land prices that began with the collapse of Lehman Brothers Holdings Inc. two years ago, but it remains uncertain whether the recovery trend will continue.

Changes in land prices lead to fluctuations in people’s assets, which can greatly affect personal consumption. Therefore, we think the government should indirectly support land prices through measures such as an extension of the economic stimulus eco-point program for houses.

The government needs to help boost the economy further by expanding tax cuts and tax exemptions for housing and real estate.

According to a survey of land prices in all 47 prefectures released recently by the Land, Infrastructure, Transport and Tourism Ministry, the average price of residential land fell 3.4 percent in the year to July 1, while that of commercial land dropped 4.6 percent. In the previous year’s survey, the average price of residential land fell 4 percent and that of commercial land decreased 5.9 percent. The latest survey shows the pace of decline has slowed in both categories.

The ministry believes the slower decline has been partly due to factors such as rising demand for land on which to build condominiums in urban areas. Recently, condominiums have become more affordable as prices have fallen sharply. Condominium sales in major cities have been recovering rapidly, bringing a bit of brightness to future land price forecasts.

Metro areas doing better

Trends in land prices in metropolitan areas–a leading indicator of land prices throughout the nation–are worth noting: In the Tokyo metropolitan area, average residential land prices fell 3 percent, while commercial land prices decreased 4.1 percent. The drops in both categories are almost half the figures from a year earlier.

If we look at the trends in more detail, signs of an end to the fall in land prices become more apparent. Take, for instance, land price trends in the first half of the year that ended on July 1 and those in the second half of the year at 15 residential locations in eight wards in central Tokyo.

During the first half of the year, land prices in all locations dropped, but prices rose in two locations, were about the same at four spots and the rate of decline slowed at eight places in the second half of the year. It is apparent that land prices began to turn around this year. A similar development can be seen in major cities such as Osaka and Nagoya.

Land prices in major cities rose markedly about three years ago, during a “mini bubble” caused by factors that included competition for prime locations among brand-name stores. However, in the wake of the so-called Lehman shock, things took a sudden turn for the worse. The latest survey may indicate the tide is about to change for land prices.

Other regions still struggling

However, land price trends in other regions are still poor. The average price of residential land in these regions dropped at a greater rate than during the previous year, while commercial land declined at about the same rate. This was the 18th straight year of decline in residential land prices in these areas, while commercial land values fell for the 19th consecutive year.

Are there any ways to prop up land prices in these regions, which have seen the value of their land fall for so long?

In Hokkaido and Mie Prefecture, some districts have increased land prices by improving their appeal as tourist destinations. Needless to say, we believe it is essential to promote local redevelopment and to encourage businesses to expand into the less urbanized regions.

(From The Yomiuri Shimbun, Sept. 23, 2010)
(2010年9月23日01時02分 読売新聞)

srachai について

early retired civil engineer migrated from Tokyo to Thailand
カテゴリー: Uncategorized パーマリンク


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