Forget tales of astronomical prices for Japanese real estate -- one small farming town is selling plots of land for just $1.50 per square metre.

Forget tales of astronomical prices for Japanese real estate -- one small farming town is selling plots of land for just $1.50 per square metre.

Yuni, a town of 5,900 people in the middle of the northern island of Hokkaido, is hoping to encourage out-of-towners with the bargain offering, in a bid to boost its dwindling population.

The offer price of 120 yen is just two percent of the local going price of 6,000 yen, and a tiny fraction of the 21.5 million yen ($272,000) charged for a square metre of earth in Tokyo's upmarket Ginza district.

"We aim to help people from outside settle in our town, stop the population decline and help the town revitalise itself," said a posting on the municipality's website.

Yuni, a one-hour drive from Hokkaido's main city Sapporo, is selling eight 330 square metre plots on a former public housing project. Buyers must commit to building a house there and living in it within three years.

About 200 people, mainly from tightly-packed Tokyo and its vicinity, have already enquired about the deal in the two weeks since it was made public, a town official said Tuesday. They included a few foreigners, among them a Hong Kong resident.

However, only Japanese nationals or foreigners with permanent residency in Japan are eligible to apply.

"Two Japanese have already applied with formal documents and we have a visitor today to inspect the site," the official, Yasuhiko Nakamichi, told AFP by telephone.

"We may need to have a lottery after the August 31 deadline. We have rolling hills overlooking rice paddies and the country view is one of our selling points."

The official said the price had been set to coincide with the 120th anniversary of the founding of the town.

Rent and land prices in Japan's crowded cities remain among the highest in the world, despite deflationary declines and years of economic lassitude.