Japan’s roadside land values have experienced a significant increase, driven by areas that have benefited from the country’s growing tourism industry and changes in the global semiconductor supply chain.
Hakuba, renowned for its skiing and hiking in the picturesque Japanese alps, saw the largest increase in assessed land price, growing by 32.1% over the past year, according to data released on Monday by the National Tax Agency. Kikuyo, a small farming town in Kumamoto Prefecture that is home to a new Taiwan Semiconductor Manufacturing Co. (TSMC) factory, followed with a 24% increase in roadside land value.
Nationally, roadside land values grew by an average of 2.3%, marking the third consecutive annual increase and the fastest rise since comparable data became available in 2010. An area of Tokyo’s Ginza district, known for its concentration of luxury designer shops, had the most expensive land in Japan for the 39th consecutive year.
The return of inflation, along with a weak yen and low borrowing costs that have attracted foreign investors, has all contributed to a recovery in Japan’s real estate market, attracting tourist. Last year, rural land prices rose for the first time in 30 years, according to the Ministry of Land, Infrastructure, Transport and Tourism.
The tax agency’s roadside land value figure is determined by analyzing recent sale prices and other data, and is used to calculate inheritance and gift taxes. The values are as of January 1st this year, and are compared with the same time in 2023.
The popularity of Japan’s powder snow has attracted global investor interest in its ski resort areas and has already driven up land values in places like Niseko in the northern island of Hokkaido.
Japan’s efforts to increase domestic chip production have helped attract companies like TSMC to Kumamoto. The world’s largest contract chipmaker is planning to build a second chip fabrication plant near the existing factory, with operations scheduled to begin by the end of 2027.