The number of property transactions in the nation has tumbled, rents have been muted and inflation expectations have waned — all of which has prompted a growing number of analysts and economists to turn bearish on property prices, which have been recovering since Prime Minister Shinzo Abe came to power in 2012.
Deutsche Bank AG's Yoji Otani said prices benefited from Abe's monetary easing and are poised to fall as government policies are faltering, joining analysts and economists at Mizuho Financial Group Inc. and Fujitsu Research Institute in forecasting declines. In Japan's property market, bearish investors now exceed bulls for the first time since 2008, according to a survey by Tokyo-based NLI Research Institute published this week.
"This will be the year when the quiet property bubble collapses," Deutsche Bank's Otani said in an interview in Tokyo. "Both 2016 and 2017 are likely to be severe years for the property market."