For the 9 months ended September 2014

TOP > ENGLISH > Services > RE/MAX Interface > Data & Market Trends > For the 9 months ended September 2014

Trends in the Japanese Economy and Real Estate Market (for the 9 months ended December 2014)

(Updated on March 3, 2015)

Trends in the Japanese Economy

The gradual economic recovery continues

The Japanese economy is continuing its gradual recovery, despite some signs of sluggishness at present. Japan’s real GDP recorded a year-on-year growth rate of 0.6% in the October-December period of 2014 (annualized rate of 2.2%). This was the first positive growth in three quarters, and the first since the tax hike in April 2014. Consumer spending, which had been expected to drive economic recovery, was flat at +0.3%. However, this was partly due to a backlash after spending grew beyond consumers’ means prior to the consumption tax hike, when the start of Abenomics had boosted consumer sentiment. For the time being, this backlash from the pre-tax-hike high can be expected to suppress consumer spending. Meanwhile, consumer spending is expected to return to a level commensurate with income as the backlash following the tax hike runs its course, and wages rise, with the income and employment situations improving and bonuses growing. In addition, corporate earnings were boosted by a significant drop in crude oil prices, as well as the weaker yen resulting from additional monetary easing by the Bank of Japan at the end of October 2014. The major contributing factors were expanding a positive primary income and increased tourism to Japan as a result of the weaker yen, as well as the reduced energy costs of businesses by cheaper oil.

Effects of government policies (postponing consumption tax hike)

The government’s decision to postpone increasing the consumption tax to 10% is currently having a positive effect on the economy, and on consumer spending in particular, because this eliminates the downward pressure on consumer spending caused by reduced purchasing power due to rising prices. There are estimates that postponing the consumption-tax hike will increase GDP growth by 0.2 percentage points in fiscal 2015, and by 0.7 percentage points in fiscal 2016. There are also estimates that the roughly 3.5 trillion yen in economic measures adopted by the Cabinet Office in December 2014 will increase GDP growth by 0.4% in 2015.

Strong economic recovery expected

Moving forward, solid economic growth is expected, as autonomous economic growth mechanisms gradually strengthen against a backdrop of a strong forward-looking investment stance by businesses, continued improvement of the employment and income situations, and improved corporate and household budgets thanks to falling oil prices. Meanwhile, although autonomous growth mechanisms will continue to exert effect in fiscal 2016, we must be alert for the possibility of a slowdown of economic growth due to such factors as flat growth in real income caused by the weaker yen, and slowdowns of the global economy.

Japanese Real Estate Market

Rising real estate prices and active trading

As a whole, real estate prices in Japan’s major metropolitan areas showed a slight uptick during 2014, and this trend appears to have become established. During the period of January – December 2014, the average price of apartments and condominiums nationwide rose 3.2% year over year to 43,060,000 yen, while the price per square meter also rose 4.0% to 603,000 yen. This was the second consecutive year that the average price and price per square meter rose, and the first time in 23 years—since 1991—that the price per square meter rose above 600,000 yen. Buoyed by Abenomics, businesses are also actively acquiring real estate as capital investments in preparation for business expansion. According to the 2014 Survey of Real Estate Acquisition by Listed Companies, published by Tokyo Shoko Research, Ltd., 56 companies disclosed that they acquired real estate or built a new factory or building in 2014, tying for the largest number of companies since the survey was started in 2008.

Foreign investors investing in Japanese real estate

Investors targeted a slightly wider area for investment during calendar 2014, with large/high-value deals by foreign investors making the news against a backdrop of the weaker yen. Singapore-based GIC purchased Pacific Century Tower in Marunouchi for about 170 billion yen. Additionally, China-based Fosun Property Holdings acquired Seafort Square Citigroup Center in Tennozu in August, and Shinagawa Seaside Park Tower in Shinagawa in December. France-based AXA Group acquired Nakano Central Park East. Individual foreign investors also have strong interest in Japanese real estate, and major real estate companies in Japan are rushing to set up dedicated desks and websites targeting foreign investors. In particular, there are reports that individual investors from China have invested 36 billion yen in the Japanese real estate market.

Outlook for real estate market

Investor interest in the real estate market is expected to continue to grow in 2015, and they are expected to invest in a growing range of areas. Demand also remains strong in the rental market, and rents are expected to rise for offices and commercial properties in city centers. Although the monetary easing by the Bank of Japan caused long-term interest rates to fall, and fixed interest rates for home loans have also fallen, raises to the policy interest rate—to which variable interest rates are tied—have been put off for the time being. As a result, these low levels may continue for some time. It appears that at the earliest, the rates will be raised in the latter half of 2017, when the consumption tax rate is raised.


Trends in real GDP growth

Total annual real GDP

Total annual real GDP 201412


Source: Prepared by International Interface based on “Quarterly Estimates of GDP time series table: Oct.-Dec. 2014 (The 1st preliminary),” published by the Cabinet Office
Quarterly real GDP growth rate (annualized year-on-year growth rate)



Source: Prepared by International Interface based on “Quarterly Estimates of GDP time series table: Oct.-Dec. 2014 (The 1st preliminary),” published by the Cabinet Office

Employment and income situations

Unemployment rate and ratio of active job openings to applicants

Unemployment rate 201412

Source: Prepared by International Interface based on “Labour Force Survey” published by the Statistics Bureau of the Ministry of Internal Affairs and Communications, and “The Status of General Job Placements” published by the Ministry of Health, Labour and Welfare
Total cash earnings (year on year)

Total cash earnings 201412



Source: Prepared by International Interface based on “Monthly Labour Survey” published by the Ministry of Health, Labour and Welfare

Business confidence in Japan

Business Survey Index (BSI) in Japan (Difference of "up"-"down" compared with previous quarter by enterprise)

BSI 201412

(Note) Includes finance and insurance business.  Figures in [ ] are the outlook in the previous survey.
Source: Prepared by International Interface based on “43rd Business Outlook Survey (October-December 2014)” published by the Finance, Policy Research Institute of the Ministry of Finance


Trends in consumer spending

trend in consumer spending 201412

Source: Prepared by International Interface based on the “Quarterly Estimate of GDP Time Series Table for Oct.-Dec. 2014 (Preliminary),” published by the Japanese Cabinet Office.
Primary income 

primary income 201412

Source: Prepared by International Interface based on “Balance of Payments,” published by Ministry of Finance Japan.


  • 海外ビジネスパートナーをお探しの方は、当社までご相談ください