Japan’s Sales Tax Rose from 5% to 8% in April 2014

Date: 2015-09-07

“• Japan’s sales tax rose from 5% to 8% in April 2014, which had a negative impact on buyers’ sentiment and the construction industry. According to the Land Institute of Japan, new condominium sales in Tokyo declined by 22.5%, from 56,733 units in 2013 to 43,961 units in 2014, whereas new condominium sales in Osaka declined by 24.6%, from 25,181 units to 18,980 units during the same period.

• With an aim to rejuvenate local economies and deliver the benefits of economic recovery to all regions, the government is focusing on developing the high-speed rail infrastructure network. Accordingly, the Japanese government signed an agreement in January 2015 to speed up the construction of two Shinkansen lines. 

• In order to expand low-cost carrier networks and improve transport facilities that will support the country’s tourism industry, the government plans to construct Terminal 3 at Kansai International Airport, which includes the construction of a 33,000m2 floor area terminal building, parking spaces and a check-in building. 

• Japanese residential property prices remained buoyant in 2014, after a strong market recovery in 2013, due to quantitative easing by the Bank of Japan (BOJ), the devaluation of the yen and increasing public infrastructure spending. According to the Land Institute of Japan, the country’s annual average residential property price index grew by 1.6%, from 100.8 in 2013 to 102.4 in 2014. The property prices varied across categories in 2014; the multi-family category recorded the largest increase, as condominium prices rose by 6.0%, compared to an increase in prices for the single-family housing category, as detached house prices grew by only 0.1% in 2014, compared to 2013 figures.

• In 2014, Central Japan Railway Co (JR Tokai) announced its plan to construct a maglev rail line between Tokyo and Nagoya. With an estimated investment of JPY5.5 trillion (US$57.3 billion), the project involves the construction of 286km long maglev line, two underground stations at Shinagawa and Nagoya, and four intermediate stations at Sagamihara, Kofu, Iida and Nakatsugawa. Construction on the project is expected to begin in 2015 and is projected to be completed in 2027.”

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