Land prices falling during 16 years in Japan

Real state and land prices have been falling in Japan during the last 15-16 years. In this chart, there is data until 2005.

Real State japan
I think this chart is made with average data from urban land prices.

After 2005 it continued falling but at the end of 2006 and during 2007 prices started rise (A little bit, around 0.something%). Prices rose really fast since the end of the 70s until the bubble exploded at the beginning of the 90s, it has been continuous fall until recently. What do you thing will happen with the sub prime crisis in the US and other countries, will it be like in Japan, or do you think it will be fixed in one or two years?

3 replies on “Land prices falling during 16 years in Japan”

The current issue in the US is not the same. Although the real estate bubble in Japan was also partly due to speculation, etc., the fall in value I feel is largely due to a slowing and now shrinking population. Fewer people means fewer homes being built, fewer offices, fewer businesse, fewer amusement parks and therefore the lower demand for property and therefore the value goes down.

While in the US, the current situation is mainly due to flaws in the lendding process and other technical factors. The US population is continuing to grow rapidly and is projected to increase to 400 million by 2050. Therefore the demand for land and housing and businesses etc. will continue to rise and the value of the land will continue to rise. The current downturn is just a normal cycle.

Land prices around my area here in the US is now thru the roof with the cheapest home in my area running $1,350,000.

Here in the US there is still massive speculation and denial about house prices. We are still on the rising side ofthe graph b/c the subprime meltdown only lenders with credit problems. Real estate speculation is still rampant in urban areas (I live in nyc); the current prices for housing do not reflect actual value – million dollar rundown apartments in “up and coming” (read shady, possibly unsafe) are still legion. We are years away from the moment of reckoning that occurred when i was living in Japan in the early 90’s.

But It will be coming to America.
And then more people will be whining about the drops in value of their cheaply made, grossly overpriced McMansions. Just like they are whining about filling up their obscenely wasteful Hummers and other SUV that have never even been on a dirt road, much less off road.
Many Americans considered it their God-given right and responsibility to waste the planet’s dwindling resources.

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