Aging and Property Prices: A Theory of Very-Long-Run Portfolio Choice and Its Predictions on Japanese Municipalities in the 2040s

Yoshihiro Tamai (), Chihiro Shimizu () and Kiyohiko G. Nishimura ()
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Yoshihiro Tamai: Department of Economics, Kanagawa University, Japan
Chihiro Shimizu: Nihon University and Institute of Real Estate Studies National University of Singapore
Kiyohiko G. Nishimura: University of Tokyo and National Graduate Institute for Policy Studies, Japan

Asian Economic Papers, 2017, vol. 16, issue 3, 48-74

Abstract: In this paper we investigate the effect of aging population on property (land) prices. A theory of very-long-run portfolio choice is developed for a transition economy from young and growing to rapidly aging population and applied to estimate property price inflation in Japanese municipal markets. The results are stunning. The simulation results in which income factors are assumed to be fixed at the 2005-10 growth level suggest that the average residential property price (land price) in the Japanese municipalities may decrease by as much as 19 percent from the present to 2020, 24 percent to 2030, and 32 percent to 2040.

JEL-codes: F33 F36 F50 F65 G00 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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