Tuesday, June 3, 2008
Japanese Uncle, What is the Japanese for Deja Vu?
Just what the world doesn’t need: another housing market in turmoil. Protracted weakness in new home sales in Japan suggests that the world’s second biggest economy is experiencing more than a technical blip. Japan is no stranger to real estate boom-and-busts. Land prices – the major determinant in a country where houses are typically pulled down rather than re-sold – only began climbing in 2006, ending 15 years of decline after the asset bubble peaked in the early 1990s. Residential land prices are still half the peak levels. The more recent slide in new home sales began in July after the government clamped down on architects who had been fabricating earthquake compliance certification.