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Japan 2019 condo supply lowest in 43 years as high prices hit demand


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I don't think it is because of labor costs; however, those are high as well. I think the real culprit is that the prices are pricing people out of the market.

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Here’s something that the article didn’t mention. What about the declining population? I mean didn’t Japan’s population decline by 300,000 last year? I think that would make sense for the decreased supply. Because you don’t wanna have a surplus of supply, considering that the population is declining.

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Factor in the shortage of manpower due to Olympic preparation. I'm sure this raised wage competition.

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It's actually demand that drives construction, not cost. Nobody builds just because they can do so more cheaply. A tight market means higher prices, so cost is not a deterrent to construction of new units. Prices wax and wane all the time.

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I think the population fell by 500,000 not 300,000.The equivalent of losing Tottori Prefecture.

The high prices could cause a sub-prime disaster in the future especially with the poor salaries in Japan.

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Unless there is collusion between real estate companies, prices should not be sticky-up (not decreasing with decreasing demand or increased supply). A smaller population and lower demand should lower the prices. That's how capitalism is supposed to work. The problem is when cartels (oligopolies) control market prices.

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The Tokyo population is increasing, while not increasing in most of the rest of Japan.

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Can't commit to buy in Tokyo with the awful commute. Save your money and buy a nice retirement house in your home country.

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I wish journalists would at least get one second opinion before publishing. Price is always a function of demand, and no text book I've read has ever cited input costs.

But of course for Japan there is also the demographics elephant in the room. I'd hate to be a Japanese new born, born to pay tax.

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10% tax on purchase of a property ... outrageous, and is clearly depressing the market.

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You would think housing, like food, would be exempted from the sales tax. Guess the Diet didnt think so.

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@juminRhee - I think I agree, the way I see it, is that Governments (not just Japan's) will squeeze as much out of us as they can. The problem is, we don't get paid more so will buy less - which puts pressure upon the suppliers to cut costs - in the case of food - Farmers earn less, yet their own supplies (Fertilizers, Animal Feed, etc) go up, hence they go bust... this is a Global issue.

Taxation is necessary, when applied sensibly, and as the Taxer the Governments should really be providing the Technology to Retailers to support that (we're in the 21st Century and have the Cheap viable Technology to do this)... However the problem is, who decides which foods should be taxed and which shouldn't, is Caviar a food that should qualify for being tax-free... for example ?

Governments needs to be smarter - define Basics, and tax accordingly. Do you really need to have a Gas guzzling Car for example - why not simply tax it at 20%, for a small electric vehicle, maybe 3%. For a bag of Rice (in Japan) ... should it be taxed at all ? Tuna Sashimi should perhaps be taxed at the higher end, as too anything else which is in less than abundant supply - surely an ecological / environmental impact could be used to influence Taxation ?...

Now as to the Tax on buying a place to live, when you buy place, you're basically paying for the land space that you will occupy - you also get taxed yearly upon that space too... With property being the most expensive item you're going to invest in, maybe 100 Million JPY or more in Central Tokyo, 10% tax is adding a fair bit of nothingness onto that. When you move outward from Central Tokyo then you're facing the prospect of declining land prices which means that 10% is simply further adding to a loss of investment - you'll potentially end up with Negative Equity. This has the knock on effect that Developers can't build properties to make profit - the costs involved simply don't make sense for them... so the arguments raised by the above article make sense. Where's it all going to go ? Well... those with several properties, will benefit, as they can rent them out, those without won't and will be stuck in a circle of either renting at higher prices or if they choose to go for buying they will end up in a potentially vicious circle of never ending debt... which doesn't bode well to today's Youth - who may as well go and live overseas, and that... doesn't help Japan... the Japanese Government really needs to wake up to Modern day dynamics of its population - no longer are people confined to a box, if they don't like it some (many) can & will get up and walk out.

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"Nobody builds just because they can do so more cheaply."

Have you told that to China?

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