Weak Yen Pushes Land Prices Up

Behind a jump in metropolitan land prices reported by the National Tax Agency on July 1 is increased investment by foreigners, pushed by a weak yen.

Whether the rise in land prices will continue, however, is unclear, with many predicting that land prices will peak after one to two years.

Five minutes by foot from JR Meguro Station in Tokyo is Meguro Gajoen, a facility that includes hotel, wedding and office space, and is the location of Amazon Japan’s headquarters. In August last year, this facility was obtained by Mori Trust Co., before being sold in January this year to an American fund that has a Chinese government-linked fund as one of its investors. The amount of money exchanged has not been publically released, but it is believed that Mori Trust bought the facility for around 130 billion yen and sold it for over 140 billion yen, showing a rise in price of over 10 billion yen in less than half a year.

According to NLI Research Institute, the amount of money paid to buy real estate in Japan by foreigners in 2014 was around 900 billion yen, around 30 percent more than in the previous year. Foreigners accounted for around 20 percent of real estate purchases of one billion yen or more.

via Mainichi

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