Land price statistics as of Jan. 1, announced by the Land, Infrastructure and Land Ministry, show that at least three of the nation's major urban areas plus some other areas have emerged from a long tunnel of real-estate price deflation. The trend is supported by increased demand for office space and investment in urban redevelopment projects due to the recovery of the Japanese economy. But land price increases in some areas do not necessarily reflect increases in normal returns from real-estate investment. Their movements need to be watched carefully to avoid a return of asset inflation.

Commercial-area land prices in the greater Tokyo, Osaka and Nagoya regions, which include adjacent areas around the three megalopolises, registered an average 1 percent increase for the first rise in 15 years. Sapporo saw land prices rise in both commercial and residential areas, as did many survey locations in Sendai, Hiroshima and Fukuoka.

In areas excluding the three metropolitan regions, however, commercial-area land prices registered a 5.5 percent drop and residential-area land prices, a 4.2 percent drop. Although prices went down, the rate of decline has tapered off for two years for both categories.