May 27 (Bloomberg) -- Japan land values declined at more than two-thirds of the country’s land sites after record earthquake and tsunami slowed a recovery in the property market, according to a quarterly land ministry survey.
Values fell at 98 of 146 locations throughout Japan in the three months ended April 1, according to a survey by the Ministry of Land, Infrastructure, Transport and Tourism today. That compares with 77 land sites that dropped three months earlier. The survey excluded three sites in Sendai and one in Urayasu that were “directly affected by the quake,” it said.
The latest survey follows a magnitude-9 earthquake on March 11 and after property values declined at fewer land sites in the previous five quarters. Demand for high-rise buildings and seashore properties slowed after the quake and a recovery in commercial property may take time as the country struggles to rebuild, Yutaka Iwaki, the government official who headed the survey, said.
“Demand for skyscrapers declined after the quake because those buildings swayed considerably,” Iwaki said at a briefing in Tokyo today. “When rents decline, property values fall, leading to a drop in land prices -- it will take time for demand to recover.”
The Topix Real Estate Index fell 0.5 percent at the 3 p.m. close in Tokyo, reversing an earlier gain of as much as 0.6 percent, prior to the release of the survey.
Only two sites showed value gains -- Kobe and nearby Ashiya, known for its luxury homes overlooking the port city. The two showed increases of up to 3 percent, while the remaining 46 sites were unchanged, according to the report.
Prices at 40 percent of residential sites surveyed fell, compared with 17 percent three months earlier, the survey said. For commercial land sites, 77 percent of locations dropped from 68 percent, it showed.
The temblor sent office vacancy rates in Tokyo and Osaka to a record high in March and pushed Tokyo apartment supply down by 27.3 percent in April, according to Miki Shoji Co. and the Real Estate Economic Research Institute.
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