tokyo real estate

tokyo real estate te cut while leaving the fiscal policy unchangedThus the movement of BOJ to appreciate the Japanese yen rather than stabilizing the asset price inflation and overheating means little can be done during the peak of the crisis Despite the Bank of Japan stepped in to hiktokyo real estatee the interest rate by May 31 1989 it seems to have little effect on the asset inflation Indeed land prices continued to rise till the early 1990sDistortions in the tax system[]Japan has one of the world’s most complicated taxation systems with its provisions deserving specific mention These provisions have been widely abused for speculation and have contributed to costlier land especially within urban areasThe is very high in Japan reported to be 75% of the market price for over 500 million yen until 1988 and it is still 70% of the market price for over 2 billion yen Yet the of land for tax purposes used to be abtokyo real estateout one-half of the market value and the was considered at face value during the bubble period In order to evade inheritance tax many wealthy individuals opt to borrow more money (since the interest rate was far lower) hence reduced much exposure to inheritance taxFurthermore given that on the land are n market price land Since the valuations did not rise in tandem with the actual rising market price the effective property tax would regress over the time As a result for instance in the area has dropped to 006% of thtokyo real estatee market price As the land price escalates much quicker than the tax rate most Japanese would consider lands as asset than for production purpose The reason is simple: strong expectation that the land prices are likely to escalate coupled with minimum property tax it makes more sense to the land price than to fully utilize the land for purposesThe land lease law[]As provided under the the rights of and are protected under the Land Lease Law This lawtokyo real estatecan be traced back during the whereby most house heads were for leaving their families in danger to be thrown out from their leased land For this reason land contract is automatically renewed unless the landlord provides concrete reasoning to object upon the land lease contract lapsedIn any cases in the event of dispute between the lessee and tenant court may summon for a hearing in order to ensure that the rent is ※fair and reasonable§ Upotokyo real estaten the rent is set by the court tenant would pay according to the rent set by the court which means landlords may not raise the rent more frequently according to the actual Hence the rent are actually kept ※artificially low§ and market fails to respond according to the rental price set by the market For such reason many landlords refused to rent out their land for such steetokyo real estatep discount price but rather leaving the land deserted to reap for huge capital gain should the land price increased sharplyChanges in the bank behaviour[]Traditionally Japanese are weltokyo real estatel known to be a great saver However the trend seems to reverse by the late 1980s as more Japanese opt to shift the funding from the banks to the 每 leading banks in a tight squeeze as the lending costs are motokyo real estatere expansive with shrinking In fact the bank behaviour has gradually become aggressive since 1983 (even before the monetary easing policy in Japan) after the ban on fund-raising in the were lifted around 1980 However major firms were not keen to utilize the bank as the source of funding For this reason banks were forced to aggressively promote loans to smaller firms backed by properties Soon especially around 1987-1988 banks were more even more aggressive to lend loans to individuals backed by properties Evidently even an ordinary can easily borrow up to 100 million yen for any tokyo real estatepurposes provided his house was used as Consequently this has adverse impact of the whole Japan asset bubble Firstly cheap and easily available loans reduced the funding costs for the purpose of speculation Secondly stock rises coupled by low interests rate reduced the and aided financing (eg bonds with etc) Thirdly combination of rise in land and stock prices pushed up the value of assets held by corporate; in which effectively increased their sources of funding since tokyo real estateuch these increased the collateral value of the assetsAftermath[]Asset price[]The asset price burst seems to exert a great effect on the overall Japanese economy By 1992 the land price nationwide declined 17% from the peak However the impact are worst for land in the six major cities as the average land prices (commercial residential and industrial) dropped 155% from its peak and land prices dropped 152% 179% and 131% respectivelyThe entire asset prices crisis was far worst especially tokyo real estatein large business districts of Tokyo By 2004 prime “A” property in Tokyo’s financial districts had slumped to less than 1 percent of its peak and Tokyo’s residential homes were less than a tenth of their peak but still managed to b