The urban land price in Japan’s six largest cities dropped by 7.8% (9.2% in real terms) in H1 2009 from the previous year, according to the Japan Real Estate Institute (JREI), ending the long-anticipated recovery of Japanese property prices.
In Japan, land prices serve as a proxy for home prices. Land prices in the six largest cities rose by 2.8% (2.8% in real terms) in 2006, 8.1% (8.1% in real terms) in 2007, and 1.1% (a fall of 0.2% in real terms) in 2008.
On a national level the price of land has been falling since H2 1991. Since the second half of 2007, land price decreases in Japan have accelerated. Land prices slid 3.4% (4.9% in real terms) in H1 2009 from the previous year
Land prices are used as a measure of residential property values partly because Japan is earthquake-prone, making the value of land more significant than the houses built on them.
The global financial crisis upset Japan’s real estate sector. Bankruptcies in real estate firms increased in H1 2009. Investors in Japanese real estate investment trust funds (J-REIT) have fled the market, leading to a huge drop in demand.
New building permits in 2008 continued to be below 2006 levels, due to tighter constructions laws. Banks remained extremely cautious, making it difficult for buyers and developers to acquire loans.
The economy however grew in Q2 2009 after four consecutive months of contraction due to the aggressive government stimulus and tax reforms. As long as the economy is able to sustain the growth, the residential property market is expected to gradually recover
from - http://www.globalpropertyguide.com/Asia/Japan/Price-History
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