Japanese land prices post first annual fall in 6 years in 2020 – tax agency

TOKYO, July 1 (Reuters) – Japan’s land prices fell for the first time in six years in 2020, the country’s tax agency said on Thursday, as the coronavirus crisis hurt demand for hotels and houses, especially in areas popular with tourists.

Prior to the pandemic, low interest rates, a booming tourism industry and a building rush in the run up to the Tokyo Summer Olympics, which were originally scheduled for 2020 but delayed to this year, had pushed up land prices.

But the economy was hit after the government last year imposed travel curbs on foreign visitors and the rolling out of emergency steps to contain the virus.

Average land prices were down for the first time since 2015 last year, slipping 0.5%, the tax agency said.

The drop marked a reversal from a 1.6% rise in 2019.

The tax agency assesses land prices as of Jan. 1 every year to calculate inheritance and gift taxes on properties.

“There were declines in downtown areas and tourist spots,” a tax agency official said.

The broad decline effected most of the country, the survey found, with land prices in 40 out of the 47 prefectures nationwide falling or remaining stagnant, while seven prefectures saw a rise in prices.

Japan’s most expensive location, an area in Tokyo’s glamorous Ginza shopping district, posted its first price decline in nine years, dropping 7.0%.

Further declines in land prices would add to evidence of the drag the health crisis is imposing on Japan’s economy, which is recovering at a slower pace than other major economies such as the United States.

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