Being a Japanese home owner has been a disappointing experience beginning in the late 1980s, when land values collapsed, and in the subsequent decades, when they have stubbornly failed to recover. But all that may be about to change. The Wall Street Journal reports that Japans’s property market might be about stir back to life (paywall). It’s a sign of how terrible things have been that the WSJ sees it as a hopeful sign that land values fell only 1.8% in 2012—the slowest pace of decline since 2008.
The situation is slightly better in Japan’s megacities. Bloomberg reported that land prices in Tokyo, Osaka and Nagoya fell by only 0.6 percent.
Ever since new leader Shinzo Abe took power with a vow to reignite GDP growth via money printing and inflation, Japan’s real estate analysts have been swept up in the same optimism that has caused a surge in demand forJapanese stocks. In fact, Japan’s real estate market was showing signs of coming back to life as early as the end of last year. Optimistic buyers, paired with low interest rates to stimulate demand, may finally be able to end the decades-long bear market in real estate that has bedeviled Japan.
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