Demographics and the Housing Market: Japan’s Disappearing Cities

Yuko Hashimoto, Gee Hee Hong and Xiaoxiao Zhang

No 2020/200, IMF Working Papers from International Monetary Fund

Abstract: How does a shrinking population affect the housing market? In this study, drawing on Japan’s experience, we find that there exists an asymmetric relationship between housing prices and population change. Due to the durability of housing structures, the decline in housing prices associated with population losses is estimated to be larger than the rise in prices associated with population increases. Given that population losses have been and are projected to be more acute in rural areas than urban areas in Japan, the on-going demographic transition in Japan could worsen regional disparities, as falling house prices in rural areas could intensify population outflows. Policy measures to promote more even population growth across regions, and avoid the over-supply of houses, are critical to stabilize house prices with a shrinking population.

Keywords: WP; house price; price; house; housing price; price appreciation; condominium price; price dynamics; price decline; price change; Housing prices; Housing; Population growth; Inflation; population change; house prices; durable housing model; akiya (vacant houses); regional disparity (search for similar items in EconPapers)
Pages: 34
Date: 2020-09-25
New Economics Papers: this item is included in nep-ure
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