Falling Demographic Not Felt By Japanese Real Estate
Japan is not safe from the current trend of real estate decline being felt by the world. Nikkei Asia reported that prices fell during the period between 1993 to 2016.
However, not all places in Japan recorded a price decline--territories north of Tokyo had managed to recover their prices, albeit slower than most. Tokyo, Osaka, and Nagoya had also managed to keep their prices rising.
Outside investments have been helping real estate survive the decline which the other markets are suffering from.
Factors like lowered interest rates are a big help too. Tourism, urbanization, and globalization have all been doing their part, but the biggest help so far came from an unlikely source. The rise of China's spending power had been a big help to Japan's economy.
Market watchers have been watching, and they are echoing guarded confidence. While things have been steadily improving, analysts are watching as Japan's population shrinks due to most of the population aging. Some municipalities will suffer, but most have been saying they are confident that population stagnation won't be a problem they cannot solve.
Japan might not be alone in its "troubles." New York share prices have been on a sharp decline since October 2018, according to Nippon.com. That, however, is because of a whole other problem entirely; the Japanese market has the population decline to worry about, while the US market is currently locked in an ugly dispute with the Chinese and the fallout affected even the property market.
The Japanese have managed to regain their losses. This return has prompted banks like the Bank of Japan and the European Central Bank to re-assess their interest rates and decide when to normalize it. However, the trade war between China and the US is expected to be prolonged, with the effects deemed as 'long-term' rather than temporary.
Assets are available for diversification. The Japanese markets have choices between foreign exchange, virtual currencies, and surprising growth in art as assets. Virtual coins have been making huge noise as of late, rallying to regain half of what it had during its remarkable run in 2017, while the growth of 6% in the global art market has investors thinking it might be viable to diversify in this branch.
With its rapidly aging population, hope for Japan might lie in its assets growing attractive to outside investors. They have been monitoring Japan's "large and liquid market." Perhaps, with a clearer view of this market, these investors might turn out to be the real estate market's redemption.