On March 18, 2025, the 2025 Land Price Survey (as of January 1) was released. Land prices for commercial areas in Kanagawa Prefecture increased by 6.6% (5.4% the previous year), widening the growth margin.
Looking at representative tourist destinations in Kanagawa Prefecture, driven by strong inbound demand, Yokohama Chinatown saw a 6.3% increase (3.0% the previous year), Wakamiya Oji in Kamakura saw a 12.7% increase (12.1% the previous year), and Motohakone in Hakone saw a 3.7% increase (not listed the previous year due to reclassification)—all reflecting higher growth rates than the overall commercial areas.
To gauge inbound demand—which significantly impacts land prices in tourist areas—I conduct interviews about the proportion of foreign visitors during site visits.
Interviews with commercial stakeholders indicated that foreign tourists account for just under 50% in Yokohama Chinatown, about 50% in Kamakura, and about 20–30% in Hakone, all lower than the 90% seen in Tsukiji on weekdays. A common factor across these three areas is that, due to their proximity to Tokyo, many foreign tourists make day trips. However, during interviews in Hakone, I encountered a concerning issue:
"Although lodging demand is strong, staffing shortages prevent increasing room occupancy rates. Factors causing these shortages include the resignation of Japanese employees during the COVID-19 pandemic, the repatriation of foreign staff, and, due to the weak yen, foreign employees moving to higher-paying countries and not returning."
As reported in the media, the food service industry in Tokyo also faces severe labor shortages, forcing restaurant operators into long working hours, and I have heard of labor-shortage bankruptcies (store closures).
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I have frequently heard from real estate agents that, in response to rising land prices and inflation, many landlords are considering raising rents.
Given the substantial loss of sales opportunities in the food service and lodging sectors due to labor shortages, coupled with rising material and labor costs, it is difficult for tenants to accommodate rent hikes.
However, I believe that by increasing labor supply, improving occupancy rates, and thereby boosting revenues, tenants will be better able to accommodate rent hikes.
So, what measures can be taken to increase the labor supply in the short term?
One solution may be to raise the ¥1.03 million income threshold. If this threshold were raised to ¥1.6 million with no income restrictions, labor participation by housewives and students would increase by about 50% by simple calculation. With gig work becoming more common today, raising this threshold would likely lead to an increase in the workforce.
This would increase the labor supply not only in major cities but also in tourist destinations, improve occupancy rates for rooms, and consequently further boost land prices in tourist areas—expectedly outpacing the overall commercial land price growth rate.
Reprinted from Real Estate Management Journal Co., Ltd. “Weekly Real Estate Management” (with permission)
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