MFIA Quarterly 1st Quarter 2020

From the fall of 2016, moderate expansion of Japan’s economy has continued. However, in 2018, the economy shifted to a stagnant trend and subsequently to continuous moderate slowdown since 2019 with a recession all but certain by the end of the year. Signs indicating a turnaround in the for-sale/transaction market for real estate in Japan, for example the decline in the contract rate of for-sale real estate and the bottoming out of transaction yields, have become conspicuous. It appears that the market has already peaked. The conditions of Japan’s real estate rental market continue to improve. However, a turnaround has become apparent in terms of hotels and retail facilities, suggesting that the market will turn toward recession with some time lag.