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Inbound Tourism Fuels Land Price Surge Across Japan; High Hopes for Development Projects Ahead
Strong demand from inbound tourism has significantly driven up land prices in tourist destinations nationwide, a trend extending to areas around the 2025 Osaka-Kansai Expo.
According to an announcement by the National Tax Agency on Tuesday, land prices rose year-on-year in 35 prefectures, and the national average increased for the fourth consecutive year.
Popular 'Little Kyotos'
A 55-year-old Belgian tourist was seen smiling as she looked at a 'sarubobo' (monkey baby) — a local folk artwork — in Takayama, Gifu Prefecture, on June 25. She said that a guidebook sparked her interest in the culture and nature in the area and that she found the traditional wooden buildings to be amazing.
Takayama is popular for its old townscape, which comprises historic sake breweries and traditional houses.
Last year, the city, dubbed 'Hida's Little Kyoto,' saw its foreign overnight visitors surge to about 769,700, an increase of 70% compared to the previous year. That number is a record high, significantly surpassing the pre-pandemic figure of about 612,000 in 2019.
Reflecting this popularity, land prices in the area along Kami-Sannomachi Shimo-Sannomachi-dori street, located in the central part of the city, rose by 28.3% this year compared to the previous year, the fourth highest increase in the nation.
According to the city's historic townscape preservation association, the surge in demand driven by inbound tourism means that buyers are quickly found even for shops on the main street of Kami-Sannomachi that closed due to the aging of their owners. The trend has left the street with almost no vacant properties.
At the Sumiyoshi Ryokan inn with a more than 100-year-old building located along the Miyagawa river, a stream famous for its morning market, more than 90% of guests are inbound tourists. 'We're almost fully booked until September,' said Tsunetada Minami, 50, who manages the inn. 'International travelers are essential for the survival of our business.'
Spreading on social media
Even in Tokyo, where land prices saw the highest increase among all prefectures at 8.1%, it was mainly inbound tourism that was responsible for the rise.
Land prices on Kaminarimon-dori street in Asakusa, Tokyo, recorded a 29% increase, the third highest nationwide and the highest in Tokyo. Nakamise-dori shopping street in the district is bustling with foreign tourists posing for photos in kimonos and buying souvenirs.
'Events like Sanja Festival have spread on social media, increasing their popularity among foreigners,' said Shigemi Fuji, 76, chairperson of the Asakusa Tourism Federation.
Meanwhile, it has also been pointed out that the number of Japanese visitors to Asakusa has been decreasing. 'Some rickshaw drivers have days when all their passengers are foreign tourists,' said Takashi Sudo, 45, manager of Isshin, which operates a rickshaw service.
Appeal of Expo
Although the Osaka-Kansai Expo, which opened in April and is being held on the artificial island of Yumeshima in Konohana Ward, Osaka, had yet to open at the time of the land price assessment, speculation over associated redevelopment projects has still boosted land prices in the ward.
The area around Yumeshima Station on the Osaka Metro Chuo Line, saw an 18.2% increase from the previous year. The station, which opened in January, is the closest one to the Expo venue.
Land in the area around Bentencho Station, a station where passengers transfer from a JR line to access Yumeshima, also saw an 11% price increases.
Near the station, there is a 20,000-square-meter plot of land, which used to be the site of a municipal high school. The city in September last year solicited redevelopment proposals for the site and received 12. 'There is a lot of interest in the area, as it's close to Yumeshima,' a city official said.
According to a British company that operates hotels in 10 locations in Osaka, the average rate for a room at its hotels has increased by 30% year-on-year since the Expo opened in April.
'In addition to visitors from Asia, there has been a notable increase in visitors from Europe and the United States,' an official of the company said. 'The Expo is serving as a huge advertisement for promoting the appeal of Osaka to the world.'
