Abstract
This is the first edition in BMI' s new series of reports on real estate sectors around the world. We have sought to incorporate data and insights from our reports on infrastructure and commercial banking - as well as our own forecasts for the economies of the various countries that we survey.
Key issues - Japan
We suggest that the following are the key issues to monitor for the real estate sector in the coming year or so:
- House prices and office space rental costs, given their recent severe downturn.
- Real growth in the construction sector. This is currently unfavourable.
- Economic growth. Japan' s GDP is projected to be negative, at least until 2010.
- Commercial bank lending. This indicates the prospects for financial stability and is the most volatile measurement in times of economic crisis.
- An improvement in export statistics, which would be expected to improve the prospects for Japan' s economy, due to its high dependence on exports.
These conclusions are based on our proprietary Real
Estate/Construction Business Environment Rating (RECBER), the component
factors of which we discuss in detail. The conclusions are also set
against recent conditions in the commercial office market - for which we
have used office rents in major cities as a proxy, and in the residential
real estate market - for which we have used housing prices as a proxy.
A major trend throughout all our real estate reports is that - mainly due to the
global financial crisis, access to funding will be more important than
usual. Accordingly, we have incorporated overviews of conditions in the
commercial banking sector - both globally and in the region of each country.
We have also looked at the issues that will drive the fortunes of Real
Estate Investment Trusts (REITs) over the coming months.
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