The average price for land in these cities rose 0.5 percent last year, the first increase since 1991, according to the Ministry of Land, Infrastructure, Transport and Tourism.
That eases the gap slightly with the three biggest cities, where prices rose 3.9 percent, up from 3.3 percent in 2016.
Nationwide, commercial land price rose an average of 1.9 percent last year, while residential prices rose 0.3 percent. Residential land prices in outlying cities, however, dipped 0.1 percent, smaller than the previous year’s 0.4 percent.
Four of the larger regional hubs – Fukuoka, Hiroshima, Sendai and Sapporo – led the rise, with their average price jumping 7.9 percent after a 6.9 percent rise in 2016.
As Japan aims to host 40 million foreign tourists in 2020, the year when Tokyo hosts the Summer Olympic Games, developers are aggressively building hotels all over across the country. The number of foreign tourists to Japan grew 19.3 percent to a record 28.7 million last year.
The slide in commercial land prices in smaller cities such as Yamagata, Niigata and Utsunomiya stopped for the first time in more than two decades as redevelopment projects progressed.
The biggest spike in commercial land price was in the popular ski resort of Niseko on the northern island of Hokkaido, which jumped 35.6 percent driven by demand for retail space and houses for resort employees, the ministry said.
The ministry surveyed 26,000 locations nationwide.