Homes still out of reach

Article Abstract:

Property prices in Japan are beyond the reach of middle-income groups or about 38% of the population. The size of the average house has decreased by 10 sq meters but is still unaffordable for most people. Though prices of condominiums have dropped from 60-70 million Yen in 1990 to 40-50 million yen in 1992, most families still need to spend six or seven times their annual incomes for an apartment. The government has tried to bring down land prices and increase land supply, but it is necessary to revise rental laws.

Prices and rates, Real estate, Real property

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Fiscal bottleneck; taxes help to dry up real-estate market

Article Abstract:

Japan's unbalanced property tax structure has resulted in the crash of the real estate market. The government requires land-owners to pay only 1% annually as real estate tax and gives a 96% tax reassessment for property sold in less than two years. This has resulted in an unbalanced property market. Though parliament passed a new land tax in 1991, this has been ineffective because of land surplus, low fixed-asset taxes, low urban farmland taxes and irrational inheritance taxes.

Laws, regulations and rules, Finance, Tax policy, Real property tax, Real property taxes

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Financial earthquake

Article Abstract:

Bankers, economic planners and developers in Japan are trying to control the sharp fall in real estate prices to avert a financial system crash. Financial experts estimate that property prices have tumbled by 25-30% after the high of 1989-90 but will have to fall by 60% to preserve the economy. Analysts feel that the property market will ultimately become more reasonable but will ruin the banking industry. South Korea and Japan, too are likely to face problems such as Japan's.

Cover Story

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