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Archived Articles  Simeon Mitropolitski is a Canadian analyst, of Bulgarian descent, and former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with the hot political and economic topics, both Bulgarian and international. ("A Royal Solution." World Press Review. June 1997, provides English versions). He was part of the first group of Bulgarian intellectuals that began the opposition movement that finally put an end to the communist regime in the country, and in 1996-1997 participated in the international monitors' teams during the elections in several Balkan countries - Romania, Albania and Bulgaria. In 1999 he was among the few Bulgarian journalists that supported NATO military operation against Yugoslavia. In 2002 Simeon and his family emigrated from Bulgaria to Canada where they now live in Montreal, Quebec.
Global Real Estate Project
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Japan: Too early to declare a victoryThe real estate market in Japan is back and running. After almost 17 years of deflation, the prices are starting to show some signs of life. Maybe not so spectacular as in some other developed countries, but the trend is upward. Is this, however, enough to claim a victory and to consider the worst economic slump since the World War II over? Not quite and not so fast. The prices don't move or still fall down in many parts of the country. The government is still pouring too much money into economy, thus increasing the price of infrastructures, and consequently helping the real estate market showing better performance. The recent numbers may signal a new positive cycle for Japan, but it's too early to claim victory.
HistoryUp until the end of the 1980s, Japan was among the hottest real estate markets in the world. Compared to Tokyo, residential prices in London, Paris, and New York City looked very moderate, almost ridiculously low. Then at some point in 1990 the bubble imploded. First it was considered to be a minor market correction, then the correction got bigger and longer, as to become the deepest and longest in the modern Japanese history. Each and every year up to 2006 the market went down by some percentage points. In total, some properties lost about the half of their market value. More than that, Tokyo lost its indisputable position of being the city with most expensive properties. By no means it has become an affordable city, but it doesn't any more ridicule the other world metropolises.
Current situationThe situation now, for the first time since 1990, looks rosy. The average residential land prices have moved up by a slight 0.1 percent during the last 12 months. The increase for commercial land is somewhat bigger. The increase affects mainly the largest cities in Japan, such as Tokyo, Osaka and Nagoya. The situation outside these best performing markets isn't so rosy. The prices are still falling down, but, which is a rather important detail, the pace of deflation is smaller than in the previous years. Among the causes for this market recovery, is the economic progress in 2006. By the world standards, an economic growth of 2.0-2.5 percent may look very moderate if not insignificant, but for Japan, which lived in economic depression for most of the post-1990 period, this growth is significant. It may be a sign of a new long economic cycle.
ForecastPositive economic numbers coming from Japan, however, should be met with a certain dose of precaution. Any economy is a conservative system that cannot be put in motion quickly. Other numbers coming from Japan, e.g. the consumer inflation index, which is still close to zero, shows that maybe not all problems are over for Japan. The staggering public debt approaches fast the mark of 200 percent of the GDP, unprecedented for any high-developed country in time of peace. The government, traditionally strong in Japan as a helping hand for economy, is to some extent responsible for this relative market recovery. Without its continuous intervention since 1990, the economic slump would have been much deeper. Only bringing public finances in order may create a situation where market growth will really mean a market growth.
-------------------- See also the directory of companies providing real estate services in, and general real estate information of Japan.
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