Staff of Reuters Read for 2 minutes (Reuters) – TOKYO, July 1 (Reuters) – Land prices in Japan declined for the first time in six years in 2020, according to the country’s tax agency, as the coronavirus outbreak harmed demand for hotels and dwellings, particularly in tourist-heavy areas. Low lending rates, a growing tourism economy, and a construction rush in the run-up to the Tokyo Summer Olympics, which were initially scheduled for 2020 but were postponed to this year, had driven up land values prior to the outbreak. However, the economy took a hit after the government placed travel restrictions on foreign visitors and began implementing emergency measures to combat the virus last year. Last year, average land prices fell for the first time since 2015, down 0.5 percent, according to the tax department. The decrease came after a 1.6 percent increase in 2019. Every year, the tax agency calculates inheritance and gift taxes on properties based on land prices as of January 1st. According to a tax agency employee, “there were drops in downtown regions and tourist attractions.” According to the report, land prices fell or remained steady in 40 of the 47 prefectures across the country, while seven prefectures saw price increases. The most expensive spot in Japan, a section of Tokyo’s opulent Ginza shopping district, saw its first price reduction in nine years, falling 7.0 percent. Land price falls would add to evidence of the economic drag the health crisis is having on Japan’s economy, which is recovering at a slower rate than other major countries such as the United States. Kaori Kaneko contributed reporting; Daniel Leussink wrote the story; and Simon Cameron-Moore edited it./n
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