I wrote how the real estate bubble economy in Tokyo is not heating up as much as it should in the global context before. I will consider how real estate prices and redevelopment will be affected this time.
In looking at the relationship between real estate prices and redevelopment, we avoided citing data as of 2022.
There are two reasons.
Reason 1) Since real estate prices are currently on the rise in the Tokyo metropolitan area, real estate prices are increasing at all locations, and the cause of the increase cannot be attributed to redevelopment.
Reason 2) Because redevelopment is still taking place even during periods of declining real estate prices, and by looking at real estate prices at that time, it is possible to consider how much redevelopment has affected real estate prices.
In addition, in order to maintain objectivity, this survey was conducted by looking at data critiqued by the Ministry of Land, Infrastructure, Transport and Tourism, rather than collecting individual real estate data.
Let’s take a look at the history of real estate in Japan.
In 1988, bubble economy burst and a policy of tightening loans to real estate was implemented. Two years later, the Basic Land Law was revised and the rules for real estate valuation were changed.
The table below shows that real estate prices fell sharply in 1991. This is the burst of the real estate bubble economy. Thereafter, prices began a gradual decline and then began to rise in 2006. Real estate prices rose until 2008, when the Lehman Brothers collapse occurred, and then fell again after the Lehman Brothers collapse in 2009.
Real estate prices continued to fall and Great East Japan earthquake happened in March 2011 and continued to fall until 2013.
(From official land price data, Ministry of land, Infrastructure, Transport and Tourism)
Since the published data is from 2010, let’s look at the areas with rising land prices in 2010.
【2010】 When about 99.7% of Japan’s land price survey sites had declining real estate prices.
In 2010, land prices throughout Japan were declining. However, among the above seven locations, Midori-ku in Nagoya city showed a particularly marked rise. The reasons are as follows.
Midori-ku, Nagoya City has been a growth center in Nagoya since 2005, and land prices have increased. The main reason for this is the extension of the Nagoya City subway line. The Sakuradori Line extension was scheduled for 2011, and land prices rose due to the increased demand for business district around the new station.
Let’s look at 2013 next.
【2013】 The rate of decline in land prices has settled but the land prices remain flat, continued decline.
（Partial excerpt from official land price data, Ministry of land, Infrastructure, Transport and Tourism）
In 2013, there were more land price increases than in 2010 due to the opening of the Kyushu Shinkansen line.
In this section, we focus on Tokyo.
1) Opening of Tokyo Sky Tree
2) Shibuya Ward redevelopment
3) Kitasenju Station Attracting universities
In both cases, land prices increased due to redevelopment.
【Summary】
Individual and regional factors determine the rise and fall of real estate prices.
On top of that, redevelopment has a positive effect on local factors and it works effectively even in the presence of financial crises etc. Conversely, some factors such as disasters can have a negative effect so it is important to keep this in mind.
How do disasters affect real estate prices? How real estate prices that have fallen due to disasters recover? These will be explained in the next time.