Japanese Purchases, Exchange Rates, and Speculation in Residential Real Estate Markets

Norman G. Miller (), Michael A. Sklarz and Nicholas Ordway
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Norman G. Miller: Well Shell Professor of Real Estate Department of Finance College of Business Administration University of Cincinnati Cincinnati, Ohio 45221-0195, http://www.cba.uc.edu/dept/fin/
Michael A. Sklarz: Director of Research Locations, Inc. 1339 Hunakai Street Honolulu, Hawaii 96816
Nicholas Ordway: Real Estate Center Director College of Business Administration University of Hawaii Honolulu, Hawaii 96822, http://www.cba.hawaii.edu/academ/deptfinance.asp

Journal of Real Estate Research, 1988, vol. 3, issue 3, 39-49

Abstract: Several luxury single-family home markets in Hawaii have experienced significant price movements in 1987 and 1988, along with a tremendous influx of Japanese buyers. Most noteworthy is the Waialae-Kahala neighborhood in Honolulu, where average price increases of over 60% in the past two years have occurred. This surge in prices has stimulated a great deal of speculative interest. The purpose of this article is to examine the effect of exchange rates (yen/dollar) and Japanese buyers on selected residential market prices and turnover. Using the most exhaustive and complete data set available in Hawaii covering 1986 through early 1988, hedonic pricing models as well as descriptive statistics are used to examine the effects of strong foreign interest in local housing submarkets.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1988
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Citations: View citations in EconPapers (18)

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