Japanese And The 80% Crash

[repetitive bleats]

It is constantly touted that Japanese property prices crashed by (up to) 80% and that they are in a similar situation to us with regard to a large population and limited land which can be built on. In fact people often point out their economy was way more productive than ours as they actually made stuff.

Is it possible that we (or perhaps just me) have been looking at this rubbing our hands in anticipation whilst forgetting that the Japanese make it difficult for foreigners to buy their property?

Edited April 17, 2014 by repetitive bleats

[The Masked Tulip]

Yes.

[zugzwang]

The UK has a much greater dependence on banking than Japan. Bankers earn their living selling debt. Without hpi the UK economy is a three-legged donkey.

[latterdaysinner]

Australians also make it difficult for foreigners to buy their property, and they've got one of the biggest property bubbles ever right now. I don't buy this UK foreign buyer myth. It's for suckers to keep them thinking that property prices will keep rising forever.

[repetitive bleats]

Australians also make it difficult for foreigners to buy their property, and they've got one of the biggest property bubbles ever right now. I don't buy this UK foreign buyer myth. It's for suckers to keep them thinking that property prices will keep rising forever.

Even though there was a chart the other day that showed 75% of current transactions are from abroad (mainly Malaysia if I recall correctly)

[interestrateripoff]

High property prices lure in those with cash especially if they are aiming to hide assets from the their local taxman, this naturally pushes property prices even higher luring in even more people to the mania. When and where it will end who knows.

[Sancho Panza]

.

Edited April 18, 2014 by Sancho Panza

[wherebee]

Australians also make it difficult for foreigners to buy their property, and they've got one of the biggest property bubbles ever right now. I don't buy this UK foreign buyer myth. It's for suckers to keep them thinking that property prices will keep rising forever.

Wrong. This is a myth - the FIRB rejected not one application for forteign purchase of property last year, no enforcement agency investigates abuses, and no process is in place to enforce asset seizure. Effectively, there are NO controls.

[steve99]

Wrong. This is a myth - the FIRB rejected not one application for forteign purchase of property last year, no enforcement agency investigates abuses, and no process is in place to enforce asset seizure. Effectively, there are NO controls.

Yes and any foregner can buy any brand new property which in fact is almost the only buyers of the multitude of high rise flats in the major cities.. As you say there are no restrictions and in fact it is encouraged by the governments and property parasite barons.

[evetsm]

Hong Kong is a better example of the myth of

1. supply shortages

and

2. foreign ownership

prevents property crashes.

the Hong Kong property crashed 50% in 1980 and 65% in 1997

[Frank Hovis]

It's purely a confidence game. There is no external reason for Japanese prices to be 80% or ours to be where they are, there is no real justification for either.

I know a very canny investor who nearly bought for buttons a second home in a nice location in the 90s but allowed pub talk to put him off - "why would you want to do that, you just lose money on property, it's a liablity, millstone round your neck" etc. etc.

It doesn't take much for that to happen - and that "not much" is the impending interest rate rises in the US. As soon as people start losing money, selling for less than they bought it gains its own momentum.

Watch from the sidelines and invest accordingly.

[Ah-so]

Japan had a massive property bubble without foreigners. It also had a crash without foreigners.

Typically prices did not fall 80% but by about half over a decade or so.

[Guest_FaFa!_*]

My understanding the bubble was mainly in the 6 largest cities (off the top of my head that would be Tokyo. Yokohama, Osaka, Kobe and two others) with other parts of Japan seeing rises of about 20 to 30 per cent whilst being large not massively lunatic. I'd imagine the 80% drop would be not be typical.

It should also be remembered the Japanese prefer not buy second hand as a rule, they prefer to demolish and build their own. This being the case, houses are not a store of savings as they don't retain value in the same way. Negative equity is not so much a problem as they are not aiming to move. If Dad gets transferred to a different office, he moves into a flat on his own in the new city and sees the kids on the weekend/as and when. Location for schools is also unimportant.

Basically I am not sure the Japanese case is really comparable given the house buying culture is so different.

[winkie]

High property prices Land lures in those with cash especially if they are aiming to hide assets from the their local taxman, this naturally pushes property land prices even higher luring in even more people to the mania. When and where it will end who knows.