What is the effect of the victory of Donald Trump on real estate market in Japan?
Date：2016/12/21
Posted on : December 4, 2016 | Category : Japan Property, Property Market Outlook
What is the effect of the victory of Donald Trump on real estate market in Japan?
[SEKAI PROPERTY TIMES] Because of his extreme statements, press had been reporting many negative effects on the Japanese economy. However, it seems that people had different expectation on President Trump’s victory. Right after Trump won the election, Nikkei Stock Average went down by 920 yen to 16,251 yen, but it recovered and even went up higher to 18,435 yen on December 1st.
From now on, it is suspected that after the tax reduction policy on wealthy people will be put into action, their money will be used for investment, accelerating purchase of equity and property.
Property price in Tokyo was thought to be almost at the highest because of expensive yen and expectation on Tokyo Olympic in 2020. But after the triumph of Trump, it can be inferred that Japanese property price will get higher due to cheaper yen and expected investment from the States.
Moreover, President Trump says that he will separate off his business and government, but his policy might be beneficial to nation and also to himself. If so, there is a possibility that property price in city center will rise.
In 2007, the year of bankruptcy of Lehman Brothers, the rise of land price occurred, especially in Ginza and Omotesando. That kind of trend is presumable in major cities around the world due to Trump’s monetary easing policy.
In later half of 2016, land price in Shibuya, Marunouch and Ginza are moving upward. For example, land price in Shibuya Koen-dori was 10,500,000 yen per last year, and it is now traded at 12,000,000～15,000,000 yen. Negative interest rate policy of Bank of Japan and expectation on Olympics induced high land price in coast area, and Trump’s policy will lead to much higher land price in Tokyo’s redeveloping area, such as Shibuya, Otemachi, Hamamatsu-cho, and Tamachi.
On the other hand, Jyonan and Jyosai area seem to have excessive supply, and it is predicted that many Tokyo areas will undergo population decline in next several decades. Therefore, investment in property will concentrate on second-hand property, hotel and Airbnb business.