Fitch: Japanese Condominium Prices Outperform Land Prices

Fitch Ratings says in a new report released today that new house price indices in Japan indicate condominium prices have been outperforming land prices and rising in line with the trend in other major countries. However, this growth is likely to slow in the next few years as it is driven in part by one-off events.

A newly introduced government property price index shows that Japanese condominium prices have risen 11% since the introduction of quantitative easing in April 2013. This uptrend started in April 2009 following the Lehman shock and contrasts with Japanese residential land prices, which have fallen throughout this period.

The rise in condominium prices has been positive for the performance of RMBS transactions in Japan; however, prices will be the most important issue for new transactions as Japanese condominium prices could be close to the top of the property cycle.