This September, the Tokyo Metropolitan Government announced a significant rise in land prices, with commercial areas up by 8.4% and residential areas increasing by 4.6%. This marks the third straight year of growth for commercial land and the 12th consecutive rise for residential, reflecting Tokyo’s steady recovery from the pandemic. But what’s behind this surge, and how have specific areas within the city performed?
Commercial Land: Prime Areas Lead the Charge
In 2024, Tokyo’s commercial land prices experienced broad growth, with all 363 surveyed locations across the 23 wards showing increases, averaging a 9.7% rise. Leading this surge were the “Central Five Wards”—Chiyoda, Chuo, Minato, Shinjuku, and Shibuya—reporting an average increase of 10.7%. At the head was Shibuya Ward, which saw a notable 13.1% increase, closely followed by Taito Ward at 12.5% and Bunkyo Ward at 11.7%.
- Top Location: Chuo Ward’s Ginza 2-chome retained its title as the most expensive location for commercial land for the 19th consecutive year. Ginza’s enduring appeal as a luxury shopping destination continues to drive prices upward.
- Notable Increases: Taito Ward’s Nishi-Asakusa 2-chome saw a staggering 25% jump in land prices, largely driven by the recovery in domestic and inbound tourism. Four of the top 10 locations with the highest increases were in Asakusa, an area known for tourist appeal.
- Redevelopment Hotspots: Areas undergoing major redevelopment projects, such as Nakano around Nakano Station, also saw significant growth. Nakano placed fourth among Tokyo’s commercial areas with substantial increases.
Residential Land: 12 Consecutive Years of Gains
Residential land prices rose by 4.6% in 2024, a notable increase from 3.0% in 2023. All 347 surveyed locations in the 23 wards experienced gains, with the highest increase recorded in Ichigaya Funagawaracho, Shinjuku Ward, at 17.1%.
- Notable Areas: Four of the top ten locations with the largest increases were in Chuo Ward, indicating sustained demand in central areas with good transportation access.
- Top Location: The Akasaka district, in Minato Ward, was the most expensive for the 6th year in a row at ¥5.56 million per square meter. This is up from ¥5.24 million in 2023.
- Tama Region: Located to the west of the 23 wards but still within the Tokyo Metropolitan area, the Tama region experienced a 4.4% increase in land prices, with 104 of the 106 locations showing growth.
Driving Factors Behind the Increase
The increase in Tokyo’s land prices can be attributed to several key factors. While the ongoing recovery from the COVID-19 pandemic has revitalized both commercial and residential sectors, low interest rates have significantly stimulated real estate investment. With borrowing costs remaining low, both individuals and companies are more inclined to invest in property, driving prices higher as demand continues to outstrip supply.
Urban redevelopment projects are also contributing to rising land values in Tokyo. As the city enhances its infrastructure, such as with transportation and living spaces, areas undergoing significant redevelopment attract increasing attention from investors and residents. This development is also largely driven by an influx of tourism, which has substantially impacted the commercial market. Neighborhoods like Nakano and Asakusa, as shown by the data, have experienced notable growth due to revitalization efforts and increased foot traffic from both tourists and locals.
Overall, a combination of economic recovery, favorable financing conditions, urban redevelopment, and a resurgence in tourism are driving significant increases in Tokyo’s land prices.
Japan as a Whole
As of July 2024, the average price of land across Japan rose 1.4% from the previous year. Residential land prices increased 0.9%, while commercial land experienced a sharper rise of 2.4%. This growth in the commercial sector can be attributed largely to the dramatic rise in visitors from abroad, driving up property values nationwide.
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