Tuesday, March 10, 2009

How to drop house prices 90%

Japanese Asset Bubble

Too much money. Too many bad debts. Zero interest rates. Quantitive easing. Easy innit.

Posted by indirectapproach @ 02:51 PM (1111 views)
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3 thoughts on “How to drop house prices 90%

  • Read this paragraph if you want to truly despair about UK property future. The Japanese property market fell from 1989 to 2007 that means it fell for EIGHTEEN YEARS!

    Prices were highest in Tokyo’s Ginza district in 1989, with choice properties fetching over 100 million yen ($1 million US dollars) per square meter ($93,000 per square foot). Prices were only marginally less in other large business districts of Tokyo. By 2004, prime “A” property in Tokyo’s financial districts had slumped to less than 1 percent of its peak, and Tokyo’s residential homes were less than a tenth of their peak, but still managed to be listed as the most expensive in the world until being surpassed in the late 2000s by Moscow and other upstarts. Tens of trillions of dollars worth were wiped out with the combined collapse of the Tokyo stock and real estate markets. Only in 2007 had property prices begun to rise; however, they began to fall in late 2008 due to the financial crisis.

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  • @1 hubbers

    I wonder if anyone in Japan, in 2007, was stupid enough to claim “green shoots of recovery” before prices started falling again in 2008. They would have looked a bit silly!

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  • I think before we get too excited about these numbers you must first calculate from where prices fell.

    $93,000 per sq ft. = (before devaluation of sterling about £48,000 per sq ft. multiply this by say an average 2 bed apartment which is say 800 sq ft.
    This equals about £38.5 million for a flat.
    A 2 bed apartment in Mayfair, London will cost about £2.5 million or about 93.5% less than apartments were in Tokyo.

    Quite how things were so far out of control in Tokyo puzzles me.

    Japanese Uncle – please correct the above if I’m wrong.

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