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Truth about the formation and crash of Japan’s real estate bubble

LIU Xuan1

(1.Institute of Japan Studies, Nankai University, Tianjin, China 300071)

【Abstract】Many Chinese scholars often have misunderstandings about the fact that how Japan’s real estate bubble formed and crashed. Actually, while the economy and urbanization developing rapidly, real estate market prices would be greatly inflated and even a price bubble would form. However, a real estate bubble may not crash or cause the bubble economy; they may be released or squeezed out by effective means. Japan’s real estate bubble that began in the middle of 1980s was caused by the housing market speculation without rigid demand. Then the bubble crashed, but the prices of real estate did not plummet. Japanese government has been playing an important role in the course. As a result, Japan’s real estate bubble has been squeezed out gradually and housing prices have been declined gently over the last two decades.

【Keywords】 real estate bubble; bubble crash; bubble economy; public housing; housing supply;


【Funds】 Major project of The National Social Science Fund of China (13&ZD106)

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    [1]. ① Assume that the average annual land price growth is 20%, then if calculated according to P = (1 + 20%)n, the land price after 10 years will be 6.19 times that in the base year. [^Back]


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This Article


CN: 22-1065/F

Vol , No. 01, Pages 1-9

January 2018


Article Outline


  • 1 Misunderstandings about the formation and crash of Japan’s real estate bubble
  • 2 Post-war relations among real estate prices, real estate bubbles and Japanese economy
  • 3 Japan’s real estate market development and reality of bubble “crash”
  • 4 Policy implications from Japan’s real estate market development
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