The Japanese Government has announced a new buy-back scheme whereby the residential and farming land along Japan’s tsunami-hit coastline will be bought up by the relevant cities and towns at slightly higher prices.
The purchase price for the land will be calculated by its estimated market value in five years from now. This is based on the government’s 5-year post-quake reconstruction plan which includes restoring all infrastructure to the disaster-hit areas.
Land prices in these coastal areas are currently at extremely low levels. In fact, the National Tax Agency announced that the rosenka land valuations for the Sanriku coastal areas had fallen by 70 – 80 percent. If the landholders were compensated at current market levels, they may find it financially difficult to move to higher ground. Under the proposed plan, the cities and towns will purchase the land at prices higher than current market levels.
However, the ever present threat of future tsunamis means that land values are not expected to return to pre-disaster levels. It has been suggested that the future land values may return to just 60 – 80% of pre-disaster values.
Residents will, of course, be expected to bear all the costs of either renting or building their new home.
The Asahi Shimbun, November 24, 2011.