International

Worldview: Japan

Winter 2020

While the Japanese economy continues its modest growth, with a 0.4 percent bump in gross domestic product for 3Q2019, the real estate market took a step back in the latter half of last year. Overall volume through the first nine months of 2019 totaled $24.3 billion, a 6 percent drop in year-over-year numbers, according to Real Capital Analytics. More troubling, the total volume for that quarter was down 26 percent, to $5.3 billion.

Despite global uncertainty related to tariffs and trade negotiations, Tokyo proved to be a bright spot for Japan. The massive metro market edged out Hong Kong in activity through 3Q2019, thanks in part to the ongoing political instability in China’s special administrative region.

Despite expected quantitative easing in 2020, Japan’s sluggish economic growth has not diminished the relative appeal of overall returns from real assets. Urban investment, barring international political or economic disruption, should continue to be a strength.