Disappearing Cities: Demographic Headwinds and their Impact on Japan’s Housing Market

From the IMF’s latest report on Japan:

“Japan’s population is rapidly aging and shrinking, and doing so unevenly across regions. Large cities, notably the Greater Tokyo area, are experiencing net migration inflows, while other regions are experiencing net migration outflows. In this chapter, we assess the regional differences in population dynamics and their implications for house price developments in Japan. Due to the durability of housing compared to other forms of investment, the magnitude of house price declines associated with population losses is larger than that of house price increases associated with population gains. These model-based predictions are likely to underestimate the actual fall in house prices associated with future population losses, as expectations of lower housing prices in the future could trigger more population outflows and disposal of houses, especially in rural areas. We suggest policy measures to help close regional disparities and avoid potential over-investment by taking account of demographic trends for housing supply.”

Posted by at 1:14 PM

Labels: Global Housing Watch


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