The basic reason for the connection between a bubble and banking problems is over-expansion of bank credit fuelled by the build-up of real estate prices and increasing credit risks. The acceleration of economic growth and increased demand for real estate triggers “euphoria” as households and companies anticipate these further properties’ prices rise and increase their willingness to engage in debt-financed investment.

There is a special thing about real estate lending: as price increases create “an extra” collateral that can be used for additional borrowing.
Increases in the price of real estate property held by companies mean a rise in the value of this asset on their balance sheet. Such capital gains lead to easier access to bank loans, which may be used for new productive investments or more speculative real estate investments. For various reasons lenders may incorrectly rely on trend-based analyses, which assumes that current market conditions continue in the future.

Thus, increased real estate prices, when related to fundamental improvements in the economic outlook or declines in real interest rates, can lead to increased borrowing. Therefore bank lending may also be a source for upward pressure on real estate prices; especially, if banks relax lending policies. Thus, lenders may undertake extremely tolerant lending policies at the peak of the cycle and extremely conservative lending policies at the trough of the cycle.

At the peak of the cycle banks may have borrowers that are highly exposed to a sharp price decline. These borrowers are known as the latest entrants in the real estate markets and they are especially vulnerable, since they have borrowed when prices were close to the peak and possibly expected that the price rally and trend would continue. These borrowers would experience the largest capital losses and the largest risk of default. Once these borrowers stand face to face with the possibility of default, they are also likely to take increasing risk (moral hazard).

Once the peak of a cycle is being approached, real estate prices become increasingly cut off from their “fundamental values” and vulnerable compared to exogenous shocks. The shock can be an unanticipated change in the overall economic performance. This event damages market confidence and causes a capital flight away from the relevant assets. When real estate prices are so high that buyers do not want to buy anymore at this price level, and of course, sellers are not able to sell at his level, there will be market correction – a bubble crashes. The price collapse can be affected substantially by forced sales of properties. The difficulties experienced by borrowers are transmitted to banks. The bad loans of banks and capital adequacy problems may lead to tightening of lending standards and credit rationing.

The next situation was common in Japan at the end of 80′s: Land is the main problem in the non-performing loans held by the Japanese financial institutions. During the period of the bubble economy, banks competed with one another in offering a large amount of loans and accepting the pieces of land as collateral. The combination of low interest rate and abundant liquidity activated real estate investments and affected most sharply on the inelastic urban land supply to generate accelerating in increase of land prices. Increases in the market value of land (land as asset) held by corporations mean a rise in the value of this asset on their balance sheet.

There have been two links between increases in land values and banks’ credit in the Japanese financial environmental. First, banks gave
land-related loans directly to real estate companies or indirectly trough loans to subsidiary companies that are the main loan channels to real
estate companies in Japan. Such lending policies rose very sharply and accelerated joint land and equities asset prices. Secondly, banks in
Japan have traditionally relied on collateral rather than project quality and cash flows. The soaring value of land provided the collateral against which Japanese firms could borrow at home to buy assets abroad.

After the collapse of the bubble economy, however, those pieces of land could not be disposed of in order to reconstruct loans because the prices of the land fell significantly and banks have been obliged to retain the pieces of land with depreciated values. Liquidity was cut back because of restriction policies and the discount rate was raised five times from 2.5 percent to 6.0 percent by the end of 1990. The so-called bad-loan disposal, which is expected to continue for the next several years, is actually nothing, but a higher level of the reserve fund covering the losses of loans.

The reserve fund for loan losses is a fund prepared to cover the losses caused by default of borrowers and it gives favourable tax treatment for such funds. Non-performing loans have not been worked out directly, but reserve funds were raised. This means that the indirect “disposal” of bad loans is officially approved for taxation purposes and the disposal method used for the past several years has simply built reserve funds. In other words, non-performing loans are still recorded on the financial institution’s balance sheets and therefore the amount of bank loans has not been reduced. The real estate market is depressed with the illiquid lands kept idle by banks without being traded in the secondary market.

The property market has become more and more transparent to the foreign investors and the removal of restrictions on foreign investments from a handful of countries in the region also helped matters. These changes have definitely resulted in renewed interest of the foreign investors. With these things in mind some guidelines are presented in this article.

The industrial property market produced unexpected results in the year of 2007. Occupancy rates and rental levels got excellent boost for all
kinds of industrial space which indicated consistent strong demand. There were benefits for developers and manufacturers as a handful of
business park sites and close to a dozen industrial sites were launched.

If you have made up your mind that you are going to invest in the Asian market, first of all you have to choose the Asian country in which you are going to invest. If you take the case of Japan, office and retail property seems the right choice and rental growth should remain consistent. Real estate is a profitable sector even in India where urban land prices had a huge surge because of foreign investment. Thailand has a fresh investment market with a bubbling young generation waiting in the wings. Property is increasingly becoming cheap and it seems one may not get a better opportunity to invest in Asian property.

Perform an extensive search in the Asian market you selected for your investment plans. Always remember that you should be very familiar with your chosen country’s rules and regulations regarding foreign investment. This is because these rules can play a very important role in the development of the investment plan you are going to execute in the investment market you selected. If you don’t give enough attention to these rules you could suffer huge losses. Each Asian country has got contrasting set of rules and regulations, but almost all are aimed at making the investors feel very comfortable. So you don’t have to express deep concerns about these restrictions.

The next thing to do is to spot an international real estate agent or broker who has got thorough knowledge about the Asian market in which you are planning to invest. The broker should be very carefully chosen because he should have a major influence on the future of your investment. Your choice of the broker will be very crucial if you are going to conduct negotiations in a language which you are not familiar with.

If you have found the right broker, you can think about an international real estate fund. This will give you the necessary diversification you need for your investment portfolio. These funds posses low minimums in the present scenario. So an intelligent investor can make excellent use of the property growth seen in most parts of Asia. You have to consult with your financial adviser about the Asian real estate mutual fund, Cohen and Steers Asia Pacific Real Estate Securities for the necessary help.

Thinking about a Real Estate Individual Trust (REIT) could be very handy if you are investing in the Asian property market. The Asian REIT market is progressing at a swift pace. The market got widened by 800 percentage in Singapore, 500 percentage in Japan and 1000 percentage in Hong Kong since 2003.

Real estate investment in Japan falls under two categories such as investing in real estate properties for private purposes and acquiring real estate properties solely for investment purposes. Included in the options that are most suitable for private purposes are brand new houses as well as condominiums, brand new apartments, second hand apartments with lowest rate of depreciation, and second hand houses. Options for investment purposes include both brand new and second hand apartments and houses.

The prices of property vary depending upon the nature of the property as well as the place where it is located. For instance, purchasing a new apartment or house in such sought after areas as Azabu, Akasaka, and Aoyama in Tokyo would serve as an excellent investment and could undoubtedly fetch you good returns in the form of rent. Likewise, investing in properties located in such hotspots of Central Tokyo as Roppongi, Nogizaka, and Atago, can also fetch you good profits.

Roppongi is a highly sophisticated area packed with superb housing and shopping options, restaurants, and nightclubs. No wonder why this area is popular among the foreigners. Buying a second hand house or apartment and renovating it in good condition could also yield good profits. Further, for those looking for cheaper options, it would be better to buy a property in remote areas like Hokkaido and Tohoku as well as in prefectures including Yamaguchi and Shimane.

A real estate property in Japan can be acquired by anyone. However, it would be more convenient to those investors with a long term visa. It would be even better if an investor has a permanent visa. The prime reason for this is due to difficulty in availing for loans. It is quite difficult even for a Japanese to avail loan in the country. Hence, it would be even chaotic if a foreign investor does not have proper visa and job. In Japan, the laws and regulations in connection with buying and selling of real estate property is managed by the Legal Affairs Bureau, under the administration of the Ministry of Justice. According to the Japanese Civil Code, on the registration of a real estate property, the rights pertaining to its ownership or leasehold would be legally established.

Real estate investment in Japan falls under two categories such as investing in real estate properties for private purposes and acquiring real estate properties solely for investment purposes. Included in the options that are most suitable for private purposes are brand new houses as well as condominiums, brand new apartments, second hand apartments with lowest rate of depreciation, and second hand houses. Options for investment purposes include both brand new and second hand apartments and houses.

The prices of property vary depending upon the nature of the property as well as the place where it is located. For instance, purchasing a new apartment or house in such sought after areas as Azabu, Akasaka, and Aoyama in Tokyo would serve as an excellent investment and could undoubtedly fetch you good returns in the form of rent. Likewise, investing in properties located in such hotspots of Central Tokyo as Roppongi, Nogizaka, and Atago, can also fetch you good profits.

in Japan, a real estate property can be acquired by anyone. However, it would be more convenient to those investors with a long term visa. It would be even better if an investor has a permanent visa. The prime reason for this is due to difficulty in availing for loans. It is quite difficult even for a Japanese to avail loan in the country. Hence, it would be even chaotic if a foreign investor does not have proper visa and job. In Japan, the laws and regulations in connection with buying and selling of real estate property is managed by the Legal Affairs Bureau, under the administration of the Ministry of Justice. According to the Japanese Civil Code, on the registration of a real estate property, the rights pertaining to its ownership or leasehold would be legally established.

A plethora of realtors as well as real estate firms are now in the scenario in order to help you find a property in Japan that goes according to your unique requirements. They provide a range of services such as market analysis, consultation, project management, asset evaluation, property management, and valuation and advisory services. In some instance, these firms even render the services of professional attorneys in order to verify the authenticity of real estate documents.

Any property having the potential to generate revenue may be called commercial real estate. Apart from the property types listed above, capital gains and income by way of rent can also be acquired through investment in niche properties. A career in this field is likely to take hours of coursework and a satisfactory pass in one or more licensing exams. Investing in the country’s real estate is a bold move, one that is extremely advantageous if carried out correctly. Anyone can acquire a property on the island. Investors must keep in mind that it is somewhat difficult to obtain a loan from a bank nowadays.

That depends on the area in which you want to invest your money. Tokyo is certainly the most expensive. Prices, as a rule, decrease steadily as the distance to the capital center increases. Old buildings are substantially cheaper than newly constructed ones. Remote areas such as Hokkaido and Tohoku, or regions such as Yamaguchi and Shimane can be especially cheap. In certain areas, local governments offer land for free to those who are willing to settle there for a number of years. Investors can easily get an idea of prices by checking with country-wide search engines.

In the mid-80′s, the country’s real estate market was excessively regulated and difficult to penetrate. Many factors have played in the easing of those regulations and Japan has now become a more open economy. Developments in technology and the Internet and internal changes in the economy have opened the Japanese market in many directions – telecommunication industry, medical equipments and pharmaceuticals industry, energy production, information technology industry, insurance industry, and financial services.

The striking 70 percent fall in the commercial real estate costs from their height in the early 1990′s shows the extent to which a loan supply imbalance can affect real economic activity. Companies and investors that are keen on entering the market can benefit by finding a reliable, well-reputed distributor or agent to represent them in the market. Japanese give a high degree of importance to personal relationships. You need much patience and repeated follow-up actions to clinch a real estate deal. If you are a foreigner entering in commercial real estate in Japan, it is a good idea to hire a professional interpreter, as many Japanese businessmen and executives do not speak English.

Believe it or not, small means Japan in many ways. And it also holds very true when it comes to even apartments. In fact, the small size of Japanese living space is legendary in many ways, however, that is only possible when you will yourself see it once. In this relatively smaller city with high population, you can find tons of different choices for apartments. Not just the types and facilities provided there in these apartments but you can find a large variety when it comes to price tag. Starting from just a few hundred dollars to thousands of dollars (also in equivalent Japanese yen) you can find tons of different options to choose from.

However, if you are a busy corporate executive who is in Tokyo for a few months then definitely you will go for a fully furnished apartment in Tokyo for obvious reasons. However, if you hail from the U.S. or European countries then you may feel a little awkward when it comes to Tokyo apartments as they are smaller in size with a lot of technologies involved to save space, such as moving or folding bedding arrangements, small size kitchens, toilets and bathrooms. But overall, you will notice every Tokyo apartment as a masterpiece in itself with space saving technology and architecture. Of course the credit surely goes to the scarcity of space in this already densely populated city where land seems to be at an absolute premium. Nowadays, with the revolution of the Internet and ecommerce, you can do everything from choosing your perfect serviced apartment within your range to ask the staff members to arrange anything that you need ready when you actually arrive.

If you are in Tokyo to enjoy your vacations then also this beautiful city has many tourist attractions to keep you and your family members busy. If you visit Tokyo around New Year then you are bound to enjoy every bit of your stay there. For many years to come you will be filled with enough sweet memories that you had spent in this beautiful city. Though, all major festivals are celebrated in Tokyo with a great zeal and zest but when it comes to Christmas and New Year this city turn out to be hot and happening. If you are there with your children then you must celebrate Christmas at Tokyo Disneyland. In that time of the year Tokyo Disneyland is full of spectacular events with Christmas fantasies all around. Similarly, on the New Year eve you will enjoy great lightings and fireworks along with some of the finest foods, beverages and games.

Tokyo is a city that is quite comfortable in its own unique skin. Just like any other Asian country,it is full of rich and vast traditions, customs and celebrations year round. As far as facilities are concerned you will find Tokyo second to none, but unlike other American and European countries there is scarcity of land. So apartments are relatively small in size with utmost utilization of every single inch of the space. Japanese people like their technical know-hows in automobile they are also known for their creativity, elegance, effective utilization of the smallest possible space. Most of these apartments and rental homes are build on the well connected roads so you will find supermarket stores, restaurants, cafe bars, eating joints, cinemas to enjoy your free time with your entire family.

In Japan, the real estate covers everything from residential properties to commercial and industrial properties. Included in the residential properties are single detached houses, high-end apartments, and excellent condominiums and townhouses. The commercial property market in Japan is considered the largest, after that of the US. There are a plethora of real estate properties that are spread across the major cities as well as prefectures of Japan. One of the specialties of Japanese people is that they always like to possess new items, no matter it is car or electronic items, and hence no exception in the case of real estate properties. In other words, brand new real estate as well as properties of less than five years old is of special demand in Japan.

Real estate investment in Japan falls under two categories such as investing in real estate properties for private purposes and acquiring real estate properties solely for investment purposes. Included in the options that are most suitable for private purposes are brand new houses as well as condominiums, brand new apartments, second hand apartments with lowest rate of depreciation, and second hand houses. Options for investment purposes include both brand new and second hand apartments and houses. The prices of property vary depending upon the nature of the property as well as the place where it is located. For instance, purchasing a new apartment or house in such sought after areas as Azabu, Akasaka, and Aoyama in Tokyo would serve as an excellent investment and could undoubtedly fetch you good returns in the form of rent. Likewise, investing in properties located in such hotspots of Central Tokyo as Roppongi, Nogizaka, and Atago, can also fetch you good profits.

Roppongi is a highly sophisticated area packed with superb housing and shopping options, restaurants, and nightclubs. No wonder why this area is popular among the foreigners. Buying a second hand house or apartment and renovating it in good condition could also yield good profits. Further, for those looking for cheaper options, it would be better to buy a property in remote areas like Hokkaido and Tohoku as well as in prefectures including Yamaguchi and Shimane. A real estate property in Japan can be acquired by anyone. However, it would be more convenient to those investors with a long term visa. It would be even better if an investor has a permanent visa. The prime reason for this is due to difficulty in availing for loans. It is quite difficult even for a Japanese to avail loan in the country.

In Japan, the laws and regulations in connection with buying and selling of real estate property is managed by the Legal Affairs Bureau, under the administration of the Ministry of Justice. According to the Japanese Civil Code, on the registration of a real estate property, the rights pertaining to its ownership or leasehold would be legally established. A plethora of realtors as well as real estate firms are now in the scenario in order to help you find a property in Japan that goes according to your unique requirements. They provide a range of services such as market analysis, consultation, project management, asset evaluation, property management, and valuation and advisory services. In some instance, these firms even render the services of professional attorneys in order to verify the authenticity of real estate documents.

All real estate with a prospective to generate outside income and revenue for the owner of the real property can be called commercial real estate. It includes many property types such as office buildings, apartment units, retail properties, condominiums and even plain land. Any property having the potential to generate revenue may be called commercial real estate. Apart from the property types listed above, capital gains and income by way of rent can also be acquired through investment in niche properties. A career in this field is likely to take hours of coursework and a satisfactory pass in one or more licensing exams.

Investing in the country’s real estate is a bold move, one that is extremely advantageous if carried out correctly. Anyone can acquire a property on the island. Investors must keep in mind that it is somewhat difficult to obtain a loan from a bank nowadays. Needless to say, it is rather impossible for a foreigner without a proper visa and a steady job to get a loan. However, if you are rich enough to buy your property without having to avail a loan, then the problem is solved. Commercial properties yield a steady cash flow, especially when lease contracts are made long-term. High income is expected throughout the contract period. As a rule, tenants are responsible for the maintenance of the property and they default less frequently on payments.

How much income would you be able to generate from investing in a property in Japan? That depends on the area in which you want to invest your money. Tokyo is certainly the most expensive. Prices, as a rule, decrease steadily as the distance to the capital center increases. Old buildings are substantially cheaper than newly constructed ones. Remote areas such as Hokkaido and Tohoku, or regions such as Yamaguchi and Shimane can be especially cheap. In certain areas, local governments offer land for free to those who are willing to settle there for a number of years. Investors can easily get an idea of prices by checking with country-wide search engines.

In the mid-80′s, the country’s real estate market was excessively regulated and difficult to penetrate. Many factors have played in the easing of those regulations and Japan has now become a more open economy. Developments in technology and the Internet and internal changes in the economy have opened the Japanese market in many directions – telecommunication industry, medical equipments and pharmaceuticals industry, energy production, information technology industry, insurance industry, and financial services.

The striking 70 percent fall in the commercial real estate costs from their height in the early 1990′s shows the extent to which a loan supply imbalance can affect real economic activity. This loan supply shock and its impact on construction activity in major commercial real estate markets have affected the economy adversely. Companies and investors that are keen on entering the market can benefit by finding a reliable, well-reputed distributor or agent to represent them in the market. It is also very important to develop business contacts through regular personal visits. Japanese give a high degree of importance to personal relationships. You need much patience and repeated follow-up actions to clinch a real estate deal.

Commercial property market in Japan is considered the largest in the world, after the US. Japanese commercial real estate includes office space, executive suit, commercial land, industrial property, and retail space. Investing in a commercial property in Japan is regarded as a great way to diversify your portfolio as well as to build wealth and enjoy tax benefits. Further, Japanese commercial real estate is considered an excellent long term investment, yielding huge returns and profits.

The commercial real estate prices in many of the areas in Japan have record prices. For instance, a piece of commercial property in Ginza shopping district of Tokyo cost around 26 million yen per square meter. Likewise, commercial real estate prices are skyrocketing in such areas as Niseko, an enchanting ski resort in the northern part of the Hokkaido Island, Nagoya, situated along the Tokaido Shinkansen road between Osaka and Tokyo, and Osaka, at the basin of the Yodo River on Osaka Bay.

Anyone can purchase or acquire a commercial land or property in Japan. But, only appropriate visa holders can invest in real estate in Japan. It would be even better if one has a permanent visa. Likewise, it is quite difficult for a foreigner to obtain mortgage through a Japanese bank in order to invest in a real estate in Japan. For the foreigners to apply for loan, it is mandatory to have at least permanent residency status and collateral in the country. A Japanese mortgage is considered a great way to finance for your commercial property. The interest rates are exceptionally low, and majority of the financial institutions provide a mortgage in yen.

Among the steps involved in the buying process of a real estate in Japan are ensuring that you have sufficient finance to buy property, making offer to the vendor, signing contracts written in Japanese which is translated in English, if required, and opening of a trust account. Additionally, the commercial property purchase transaction include expenses in the form of stamp duty, registration and license tax, property acquisition tax, and fixed assets tax. A plethora of real estate firms, realtors, and property builders are now available to help you in locating a commercial property according to your budget and requirements, no matter it is industrial property, office buildings, or retail spaces. Many of the real estate firms have a section exclusively to cater to services with regard to commercial real estate. Some of them even provide the service of an expert lawyer to verify the authenticity of documents.

Mostly, these firms render a continuum of services in connection with commercial real estate, such as, helping you in locating a commercial land or property that goes with your requirements as well as effectively dealing with the procedures involved in the sale or purchase of a property. Apart from these, there are certain real estate firms providing the service of solicitors, who in turn offer services such as checking of the content written in the contract, ensure that the commercial property is unencumbered, trust fund services, and independent objective advice. In some instances, these firms offer services such as asset management, office leasing, and finding a suitable tenant.