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Japan Real Estate Report Q3 2011
Business Monitor International, June 2011, Pages: 57
Business Monitor International's Japan Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Japan's Real Estate industry.
The earthquake and subsequent tsunami that ravaged Japan’s seaboard in March wreaked havoc on the real estate sector. New research claims that the damage from the Japanese earthquake has affected around US$700bn worth of insured property, according to the Wall Street Journal. The tsunami also hit areas with an estimated US$24bn-worth of insured property.
This comes on top of existing and well-known structural problems in the sector, with the government under pressure to rein in its massive debt. These long-term problems led to an average land price decrease of 3% in 2010, following a drop of 4.6% the previous year. The improvement was due to recovering demand in the real estate market, which saw Japanese real estate investment trusts (REITs) double their acquisitions during the year. This is likely to be reversed as investors hang back in the wake of the earthquake and tsunami – and subsequent slump in consumer and business confidence. Vacancy rates have already risen to 9.2% and 12.4% in Tokyo and Osaka respectively, from 9.1% and 11.9% in February. Hiring demand at regional offices outside Tokyo has also picked up since the earthquake.
Despite the gloomy outlook for the sector there is some positive news in the government announcement that it will build 100,000 new temporary homes. The developments will house those evacuated from their homes due to the tsunami and earthquake and are expected to cost US$50bn.
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