.jpg "Savills")
- Japan’s economic outlook is cautiously optimistic, and the real estate market is attracting large amounts of overseas capital, particularly due to low interest rates and its stable fundamentals.
- Elevated inflation and historic wage growth have triggered some moderate nominal economic growth, which should also help make national fiscal conditions more sustainable going forward.
- Japan will remain among the most populous countries in the world, and Tokyo is projected to still have one of the largest metropolitan populations for the coming decades. Population ageing will continue unabated but in a gradual manner.
- Societal changes will force Japan to adapt to remain competitive; greater levels of immigration and further labour participation among elderly residents are increasingly mooted solutions.
- Multiple large-scale developments, as well as public transportation upgrades are in the pipeline for Japan’s major cities.
- Notable game changing developments will be the Osaka Integrated Resort (IR) project and the Chuo Linear Shinkansen, both of which will have transformative effects on Japan.
- Risks remain prevalent, including those relating to rising geopolitical tensions, climate change-accelerated natural disasters, and Japan’s significant national debt.
- Overall, Japan’s stability and sound fundamentals will prove to be vital assets as it grapples with a myriad of challenges moving forward.
Japanese market ripe with opportunity for the coming decades
Japan’s prospects look to remain relatively bright until 2040, regardless of some prevalent risks. Although demographic conditions are challenging, changes should be gradual and manageable, and Japan is actively exploring new avenues for innovation and growth. In particular, game-changing developments such as Integrated Resort and the Chuo Linear Shinkansen are expected to generate huge economic benefits nationwide, while multiple large-scale mixed-use commercial developments and public transport projects look to improve the urban landscape in Tokyo and beyond. As such, Japan will likely remain a popular destination for overseas capital for the coming decades, particularly given its robust and mature real estate market, and sound and stable fundamentals.
Savills Research & Consultancy