The flip-side of Prime Minister Abe's announcement of National Strategic Special Zones is there have been hints that the plan is to deregulate in strategic areas first, and then gradually expand the areas that deregulation applies to, most likely in order to avoid strong resistance to a sudden nationwide deregulation. Such regulation has the potential to completely change Japan's real estate market, making Prime Minister Abe's movements post-upper house election worth keeping an eye on.
Another policy likely to have a large influence on real estate market trends is the implementation of "minus interest". In Europe, which acted as a precedent for negative interest policies, investment funds have been directed towards real estate, and in Denmark and Northern Europe etc. there are those who point to this as the beginning of a bubble. Japan has also seen a gradual increase in news and reports of increased investment based condominium buying and selling since the introduction of minus interest in January this year. However, with the increase of easy real estate investment, whether or not people willing to buy condominiums at high prices will continue to appear is a risk pointed out by some articles. To begin with, minus interest is a monetary policy thus far unknown to capitalism, and even the president of the central bank has expressed uncertainty about what will happen.
Negative interest has only just begun. What will happen when the market easing policies, and so called "exit policies" begin to be recognized? This is untrodden ground, so it's hard to guess.
However, with the decrease of deposit and mortgage interest rates, the number of people looking to invest in stocks or real estate seems certain to increase.
May 30, 2016