The Nikkei Stock Average reached a new record high.

On February 22, the Nikkei Stock Average reached 39,098 yen on the Tokyo Stock Exchange. This is the highest mark in 34 years.

There are those who are positive who say, “We’re finally over the hump, now let’s get on with it! while others say, “This is a bubble,” or “The situation is worse than it was back then; this not good at all.”

There are different opinions as to which side is right, but I think it is a bit crazy to be making a big deal out of figures from “a third of a century ago” when other countries have achieved greater economic growth (at least more than Japan) over the past 34 years. Nevertheless, it must be a turning point in the sense that the wall has been crossed.

The world’s economic boom and bust is not just about stock prices. Even though stock prices have returned to the bubble period, it is not at all true to say that the world is booming now as it was during the bubble period. Interest rates and exchange rates are also different from those of that time.

During the bubble period, the interest rate on time deposits was about 6%. Now, if you round up, it is 0%. As for the exchange rate, there is not much difference between the two at around 140-150 yen per dollar, but there is much concern that the yen will weaken further, whereas at the time of the bubble, the yen was in the process of transitioning from over 200 yen per dollar in the early 1980s to a historic high of less than 100 yen per dollar.

The living environment surrounding us is completely different from that of those days as well.

During the bubble, the Internet was not nearly as widespread. Cell phones, let alone smartphones, were not widespread, and social networking services were yet to be birthed. The Internet, smartphones, and SNS were all absent. People in their mid-30s today would doubt that they could make a living with these things. Even the author, who knows those days, can no longer go back to the days without the Internet, smartphones, and SNS, nor can he remember exactly how he lived. I wonder how the world can change so much in such a short span of time as only 30 years, even if the values have completely changed before and after the war.

A major change was also in the real estate industry. Illegal installation of signs wrapped around utility poles and standing signs on the road, which was common practice even among major companies at that time. Visiting customers’ homes at night and in the morning. These sales tactics may not have all phased out, but they are no longer practiced by proper businesses.

Customer preferences have also changed significantly from the bubble period to present day.

The most popular place to live nowadays is the tower condominium in the center of the city. There are many different types of condominiums in the world, and some people may choose a home deep in the mountains or a house on the beach, but the supply of tower condominiums in central areas are abundant and the prices are high. The typical “popular real estate” is a tower condominium in the city center, even if there are some signs of decline.

The attraction of high rise condominiums in the city center is for their convenience. For example, a symbolic example in Kansai is the high rise condominium in the Grand Front area. The nearest station is JR Osaka. The surrounding condominiums are also walking distance from Umeda Station on the Hankyu and subway lines. You can get to the station without getting wet. There are also condominiums directly connected to the station in Honmachi, Kitahama, Sakaisuji Honmachi, etc., which are also very popular.

Besides Umeda, there is Nakatsu and Fukushima in the adjacent areas. There are also high rise condominiums in downtown areas such as Namba and Sannomiya, as well as in Takarazuka, Takatsuki, and other suburban communities, and they can be considered very popular. There are no tower condominiums in Kyoto City due to height restrictions, but there is a forest of high rises in the neighboring city of Kusatsu in Shiga Prefecture. All of them are close to train stations and have excellent shopping facilities.

Close to train station and convenient shopping, it is not surprising that they are so popular.

In 1986, the “dream house” was a detached house in a quiet residential area up a hill. The reason for “up the hill” was that residential areas in the Hokusetsu-Hanshin region, such as Nishinomiya-Kobe, Ibaraki-Takatsuki, Minoh-Kawanishi, were located in the hills. In addition, the areas near the station were bustling streets with many commercial areas and shopping facilities, while the residential areas away from the station were “quiet residential areas” with almost no shopping facilities and convenience stores at the time. Many people dreamed of quiet residential areas because there was no demand from families for land conveniently located in front of stations. What would be built there were, of course, “single-family homes.”

This is the exact opposite of what it is now. Flat access, not up the hill. Busy commercial areas, not quiet residential areas. And not single-family homes, but condominiums. It’s a stunning change in preference.

The time to buy real estate is when you want it. In the world of real estate, it is difficult to predict market conditions three years in advance, and it is impossible to know what will happen 10 or 20 years from now. If you keep this in mind the almost unbiased forecasts of the future, such as demographic trends, you can choose the property that you think is a “bargain” in the market now, the property that is best for you right now.

This is the best choice.

The logo of RE/MAX APEX here in Osaka, Japan

For additional information or any questions please contact us here