TOKYO (Reuters) - Land prices in Japan’s largest cities rose for the first time in six years in 2013 while declines slowed in the rest of the country, data showed on Tuesday, as Prime Minister Shinzo Abe’s loose-money policies spurred asset purchases.
Commercial land prices in Tokyo, Osaka and Nagoya rose 1.6 percent on average, reversing a 2012 fall of 0.5 percent, while residential land was up 0.5 percent, compared with the previous year’s 0.6 percent decline, according to a survey released by the Ministry of Land, Infrastructure, Transport and Tourism.
In other cities, prices declined for a 22nd year, highlighting the stark divide between the biggest urban centres and smaller ones. Nationwide land prices, excluding the top three cities, fell 1.7 percent last year, compared with a 2.8 percent decline in 2012.
Abe’s government spending and the Bank of Japan’s flood of cash into financial markets, aimed at ended 15 years of deflation, have weakened the yen and spurred a surge in corporate profits and stock prices.
“Because of the stock market rise, wealthy individuals were encouraged to invest in housing in exclusive residential areas,” said Isao Ishibashi, a member of the ministry’s land appraisal committee.
Although some market players have expressed concern that low interest rates, an ocean of liquidity and a hunt for yield are prompting land speculation, Ishibashi insisted there is no bubble. “The recent rise in land prices reflects the real economy,” he said.
Land prices were especially strong near manufacturing centres, reflecting how exporters have benefited from the weaker yen. The Nagoya area of central Japan, home to the world’s largest carmaker, Toyota Motor Corp (7203.T), led the top three cities in commercial and residential land prices, which rose 1.8 percent and 1.1 percent respectively last year.
Tokyo residential land prices were up 0.7 percent, led by the posh Chuo ward in the centre of the capital, up 8.7 percent. Part of Chuo in Tokyo Bay, a key staging ground for the Tokyo 2020 Olympics, climbed 10.9 percent.
In Fukushima prefecture, home of the nuclear power plant wrecked in the 2011 earthquake and tsunami, overall residential land prices rose 1.2 percent, reversing a 1.6 percent decline in 2012, as people near the stricken reactors sought land in other parts of the same prefecture.
Reporting by Junko Fujita; Editing by Richard Borsuk