Japan has for decades suffered from falling land prices following its real estate bubble bust in the early 1990s. But nationwide, land prices have been rising in recent years and in 2018 increased 0.3% for residential land and 1.9% for commercial land. Understandably, land prices in the biggest cities – and within them, in the inner ward areas – have seen price growth easily outstrip these national figures. Commercial land prices across Greater Tokyo were up 3.7% last year but surged even higher in Greater Osaka (up 4.7%), Sapporo (up 8.8%) and Fukuoka (up 12.3%) according to official data. So too, across APAC, we have seen land prices increase well above CPI in recent years – notably for industrial-zoned land of Tier 1 Chinese and Australian cities.
Data points through end of May 2019. Change represents month-over-month change.
Overall unemployment rates across APAC are very low, even at multi-decade lows in some cities. Thus it has been difficult for construction companies and contractors to find and retain suitable skilled and unskilled labor. A recent survey by Turner and Townsend found that none of the major markets of APAC had a surplus of construction labour and only two – Brisbane and Perth – were in balance. All other APAC cities were deemed to have a deficit of labor in the sector. Construction labor costs across the region vary widely: in the most expensive Pacific markets, these costs are roughly double those of the most expensive Asian markets (Japan, South Korea and the City States) which are, in turn more than twice as pricey as some of the other Asian markets.
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