Real Estate Deflation Looms in 10 more Countries.

Posted On Thursday, 05 June 2003 02:00 Published by eProperty News

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Japan's economy has seen near continuous deflation since 1995. Over the past eight years commercial land values in Japan have more than halved.

Japan's economy has seen near continuous deflation since 1995. Over the past
eight years commercial land values in Japan have more than halved. Now Hong
Kong SAR, Taiwan Province of China and Germany have been designated
high-risk deflation countries by the International Monetary Fund (IMF).
Seven other countries are also on the deflation radar screen, currently
denoted as moderate deflation risk countries.
"Real estate markets in these risk countries could be threatened by dropping
values," says ResearchWorldwide.com - The Worldwide Commercial Real Estate
Information Portal.
The Urban Land Price Index, produced by the Japan Real Estate Institute,
shows that Japan's commercial land values have declined by 52% from March
1995 to March 2003.
"However, the more worrying factor is that the annual drop in Japan's
commercial land values is accelerating. Newly released figures on commercial
land prices from the Japan Real Estate Institute show a 9,9% drop for the
twelve months ended March 2003," ResearchWorldwide.com warns.
Deflation, as measured by a decline in CPI or GDP deflation, is increasing
in a number of countries. During the first half of the last decade only 1%
of all countries were experiencing deflation. The last five years have seen
10% of all countries experiencing a decline in consumer prices.
The IMF has ranked countries in terms of their deflation risk. High-risk
countries are: Japan, Hong Kong SAR, Taiwan Province of China and Germany.
Moderate risk countries include: Belgium, Finland, Norway, Portugal,
Singapore, Sweden and Switzerland.
"The difficult task of ensuring responsible real estate investment could be
under pressure with the danger of deflation hanging over these ten countries
of which, some or all, could join Japan in the real estate intensive care
unit in the years ahead," says ResearchWorldwide.com.
"The commercial real estate investment market has to be aware of
opportunities and pitfalls that a possible deflationary future may hold. By
sharing this knowledge of likely deflationary scenarios in these ten
countries, in the moderate to high risk categories, as assessed by the IMF,
and the experience of Japan's real estate problems, we aim to ensure that
responsible real estate investment occurs worldwide," explains
ResearchWorldwide.com - The Worldwide Commercial Real Estate Information
Portal.

Publisher: Cape Business News
Source: Cape Business News

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