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Stefan DW

Think Japan: Time for reanimation?

Stefan Wundrak investigates Japan’s investability for long-term real estate investors from a demographic point of view.

Japan has been a world leader in the global megatrend of demographic change, characterised by an ageing population. This will lead to a decline of the total population, which has never previously been experienced by an economy in the absence of a major disaster. Given that large parts of the developed world will go through a similar demographic phase as Japan in the future, Japan may serve as a useful indicator for what to expect from real estate returns going forward elsewhere.

With our global market analysis focused on cities instead of countries, we highlight the importance of looking beyond the national picture in the case of a factor such as demographics. Analysis within the report highlights the stark differences in the demographic trajectories between the main Japanese cities. Tokyo, for example, is forecast to stay perpetually younger than the rest of the country.

The report concludes that real estate investors will have to brace themselves for the long-term relative decline of rental values to continue across most cities, with a considered investment focus on those cities that are demographically stronger.  

Download the report