The nation's average land prices fell for the seventh straight year last year, tumbling under the weight of the recession and selling by companies, the National Tax Administration said on Wednesday.
The key average land price index, called rosenka, declined 7.1 percent from Jan. 1, 1998 until Jan. 1. this year, to 158,000 yen per square meter, according to the agency.
The index is used for calculating inheritance and donation taxes. It is based on the National Land Agency's data on a one-square-meter area along main streets on about 390,000 locations across the nation as of Jan. 1.
The fall in land prices last year comes as a blow to the real estate industry after the previous year had shown a glimpse of hope. Although the rosenka fell 5 percent in 1997, the figure was better than the 8.3 percent decline recorded the previous year and suggested that the tumble in land prices was ending. Rising land prices in central Tokyo had slowed the pace of falls in land prices.
However, the latest figures seem to have dashed those hopes.
They demonstrate that the nation's economy is still suffering from
the aftereffects of the bursting of the speculation-driven,
bubble economy in the early 1990s, analysts
A plot in front of the Kyukyodo stationary shop in the Ginza shopping district of downtown Tokyo took the title as the nation's most expensive land lot for the 14th straight year.
The lot was worth 11.68 million yen per square meter, which represents a 1 percent decrease from 1998 and was a third of the 36.5 million yen it was worth in the peak year of 1992. Nevertheless, a piece of land the size of a postcard in front of the shop is still worth 173,000 yen.
Land prices failed to rebound in all of the nation's 47 prefectures. The average land prices declined in an overwhelming majority of the prefectures—44—while prices remained at the same level as last year in the three other administrative districts.
Hokkaido saw the largest year-on-year decline of 14.1 percent, reflecting the region's depressed economy hit hard by the bankruptcy of Hokkaido Takushoku Bank in November 1997.
Sapporo witnessed a plunge of 30.7 percent in average land prices, the second straight year-on-year plunge. It was the second-biggest ever drop, second only to a 31.4 percent decline recorded in Osaka in 1995.
Hokkaido was followed by Chiba and Kyoto prefectures in terms of declines in their year-on-year average land prices.
In the Tokyo metropolitan area the average land price plummeted 7.6 percent in 1998, as compared with 5 percent in 1997.
The rate of decline also widened from 5.3 percent last year to 8.1 percent in the Osaka region, consisting of the city of Osaka and Kyoto, Hyogo and Nara prefectures.
In Aichi Prefecture and its vicinity, prices fell 8.8 percent—more than double the previous annual decline of 4.2 percent last year.
In other areas, the fall in prices widened from 4.5 percent in 1997 to 5.9 percent last year.
The average land price of 98 locations in commercial areas nationwide was 1,348,000 million yen, down 12.8 percent from the year earlier.