Opinion | Tokyo property market set for Olympic bounce

Japanese media is full of speculation that Tokyo may trump the other shortlisted cities of Istanbul and Madrid to host the 2020 Olympic Games. The IOC’s focus on safety and security will no doubt be a major factor, considering the current instability and civil unrest in the Turkish and Spanish capitals.

An IOC veteran from Europe was quoted by Japanese media as saying that Tokyo was within reach of winning the bid, while another high-ranking member was reported as saying that Tokyo would triumph as long as it did not make any big slip-ups ahead of the September vote in Argentina.

Tokyo estate agents, starved of good news for a quarter of a century are suddenly rubbing their hands in glee.   “This would have a large effect on Tokyo real estate, especially around the Tsukiji fish market area, as that market is slated to be redeveloped and used as the primary venue,” says Tokyo agent Erik Oskamp.

The property market in Japan has been in a slump so long it’s down 80-85% from 24 years ago. “This correction was long overdue,” says Oskamp, with much understatement. Even without the Olympics, Tokyo property is experiencing a leg up this year, thanks to Abenomics.

But it’s coming off a very low base and property is still catching up with the financial markets, with prices rising fast, Oskamp says.  “It looks like all the money the Bank of Japan is printing is going into property.” He’s also sees the first signs that rents have stopped falling and that deflation might be ending, at least in Tokyo. Compared to Hong Kong, the prices look unbelievable.
 

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