Extremely high prices of housing in Tokyo are well known. However, a real puzzle of the Tokyo housing market is not the absolute level of housing purchase prices, which could be justified by its high productivity of residents and limited supply, but the high purchase prices relative to rents. We take advantage of annual micro data sets which we have compiled from individual listings in the widelycirculated real estate advertisement magazine. A data set compiled from the "properties for investment" section lists both asking (purchase) prices and rents for the same property. With this data, the price-rent ratio is directly observable and expected capital gains before tax and commissions are found to be just less than 90 percent in ten years. The "repeatedly-listed properties for investment" data set, a subset of the first data set, contains only those units in the same buildings after a one-year interval. In this data set, price, rent, and ex post capital gains are all observable. They are used to show that ex post returns on housing investment in the last four years were actually rather modest. The data set for "housing for purchase" and the data set for "housing for rent" data sections were separately used for hedonic regressions, from which we constructed the hedonic price index and the hedonic rent index. Those regressions show the effects of various determinants for housing prices and rents. The time (year) dummy variables in the hedonic regressions give that estimate of increases in prices and rents in the last eleven years in Tokyo. According to these estimates, prices increased 85 to 90 percent over the 1981-92 period, while rents increased about 65 percent during the same period. The price-(annual) rent ratio rents appears to have fluctuated around a constant ratio between 17 and 32. Finally, the weak-form efficiency of excess returns on housing is rejected. However, the conclusion is tentative considering the small sample of our data.
This paper proposes a method of valuation of housing using a hedonic price function , which leads to pareto optimal allocation in the housing market. The real theoretical prices of houses can be calculated by regression of the hedonic price function and substitution of attributes and quality adjusted price index in the estimated equation. We show how to remove analytical error in this process. To realize this appropriate method of valuation of houses, information to be disclosed is estimated equation of hedonic price function, parameter to calculate the real theoretical prices of houses and the attributes and the offer prices of houses. The method of valuation of housing proposed in this paper will contribute to the market of used houses and newly-buillt houses in the region.
Existing housing is not fully utilized in Japan. We explore the problems that discourage the utilization of the existing housing. We present policy plans to solve these problems, and to activate the existing housing market. Our plans include using a hedonic price function to determine appropriate methods for valuing existing housing, introduction of latent defects insurance for existing houses for sale, encouraging the use of fixed-term housing leases and an providing an intermediary service between the elderly and next users of their houses. Our plan will accelerate the utilization of existing housing and ease the process for the elderly of selling or leasing existing vacant housing.
We study the extent to which differences in home ownership investment are caused by differences in information known about the property. We study the advantages accruing to buyers who have complete information and who can pay less than the equilibrium price if sellers undervalue their properties. The reduction in home ownership investment can increase consumption or investment in other assets. We develop an empirical model to capture the gain to such buyers. We estimate this to have been 12.6% − 27.6% of the equilibrium price of houses at maximum in the Tokyo metropolitan area during the 1980s.
There is a strong need for barrier-free rental housing because of the rapidly aging population in Japan, where the share of barrier-free rental housing is only 18.24% of total rental housing. We propose a policy to solve the problems associated with supplying barrier-free rental housing. Our scheme involves a method of funding rental housing with a securities investor, as well as implementing property management and introducing rent subsidies. The plan entails funds being collected to construct barrier-free rental housing. The housing will generate positive rental profits, which will, in turn, lead to the increase in the supply of barrier-free rental housing. According to our plan, the low-income elderly will also have access to barrier-free rental housing. Copyright 2009 The Author. Journal compilation 2009 Blackwell Publishing Asia Pty Ltd
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.