TOKYO -- Ginza 4-chome, the famous plot in front of 128-year-old musical instrument store Yamano Music, saw land prices dip up to 3% in the latest government survey.
The most expensive real estate in the country was one of 38 districts where prices fell -- up from just four in the previous survey.
The ninefold expansion of losers reflects the scope of economic damage left by the coronavirus pandemic.
The Ministry of Land, Infrastructure, Transport and Tourism's quarterly Land Value LOOK Report, which was released Friday, tracks changes in the appraised value of land in 100 districts in major cities, including commercial and residential areas.
Values dropped between April 1 and July 1 in 38 districts. Just one saw positive growth, compared with 73 in the prior quarter, while 61 remained flat. This marked the first time in eight years that losers outnumbered winners.
This followed five straight years of annual growth through Jan. 1 -- fueled by urban redevelopment and an influx of more than 30 million foreign tourists yearly. This trend had begun spreading beyond the big three cities of Tokyo, Osaka and Nagoya when the pandemic broke out.
The slump was particularly pronounced in shopping streets and entertainment districts, where much economic activity dried up amid government requests for businesses to close and residents to stay home.
In greater Osaka, 17 of the 25 districts in the survey declined in value, with the bustling Shinsaibashi and Namba areas logging declines of 3% to 6% after increases of less than 3% in the previous report. All nine of the covered districts in Nagoya lost value.
The drop-off was less severe in Tokyo, where nearly 90% of districts stayed basically unchanged in value, but some of the city's biggest commercial destinations fared poorly. Kabukicho and Ueno were downgraded from small rises to losses of 3% to 6%.
The ritzy Ginza district, around Yamano Music, saw prices dip up to 3% after staying flat in the previous survey. "Sales at retailers and restaurants have fallen sharply" there, which has made it "harder to close high-value property deals," said an appraiser quoted in the report.
And even when cities besides the big three held steady -- such as Sapporo, where both surveyed districts stayed roughly unchanged in value -- analysts voiced concern about the outlook going forward.
"People have started coming back to shopping areas, but there's still some wariness," said Takeya Saito of the Hokkaido Association of Real Estate Appraisers.
The evaporation of foreign tourism weighed on land values in cities as a whole. Visitors from abroad plummeted 99.9% on the year for four straight months through July due to a travel ban aimed at curbing the spread of the coronavirus. While some business travel is resuming on a limited basis, it remains unclear when the restrictions will be relaxed for tourists.
The absence of foreign guests has dragged down demand in a hotel industry that already faced oversupply issues, said Takashi Bamba of the Sumitomo Mitsui Trust Research Institute.
"The impact will appear going forward in areas where such facilities drove rising land values," Bamba said.
Meanwhile, companies are starting to downsize urban office space as more workers telecommute.
"Little by little, office contracts are starting to be canceled, and it's more evident in large cities," said Shigeo Hirayama of the Urban Research Institute, who cited this as another factor in stagnating or falling land values.