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How Are Tier 2 Metropolises Affected by Housing Asset Value Deflation in the Depopulation Era? A Comparison between the Tokyo and Kansai Metropolitan Areas

Author

Listed:
  • Masaaki Uto

    (Graduate School of Environmental Information Studies, Tokyo City University, Tokyo 1588557, Japan)

  • Sophie Buhnik

    (Ecole Supérieure des Professions Immobilières, 92300 Paris, France)

  • Yuki Okazawa

    (Mitsubishi Research Institute Ltd., Tokyo 1008141, Japan)

Abstract

This study analyzes the differences and similarities between Tier 1 (Tokyo) and Tier 2 (Kansai) metropolitan areas due to shrinking city problems. Both metropolitan areas will see a dramatic decrease in the housing asset value (HAV). Kansai is declining at a faster pace than Tokyo: it is projected that HAVs will register a further decrease of around 38% by 2045, and the decline will be quantitatively more important in the northern suburbs of Osaka. These results raised the question of whether Kansai would be more impoverished by HAV deflation. By focusing on the income multiplier of HAV per household, we find that Tokyo has a higher income multiplier of around 4 (against 2 for Osaka), thus causing much greater HAV deflation per household in Tokyo. Greater HAV deflation per household entails more severe problems for elderly households that need to finance their retirement. Considering our findings, despite earlier and faster trends of HAV deflation in the Tier 2 metropolitan area, the Tier 1 metropolitan area could face big socioeconomic challenges in the future. We conclude that HAV deflation leads to problems of different nature depending on metropolitan rank, rather than just knowing which one is losing more through HAV deflation.

Suggested Citation

  • Masaaki Uto & Sophie Buhnik & Yuki Okazawa, 2024. "How Are Tier 2 Metropolises Affected by Housing Asset Value Deflation in the Depopulation Era? A Comparison between the Tokyo and Kansai Metropolitan Areas," Land, MDPI, vol. 13(4), pages 1-20, March.
    • Handle: RePEc:gam:jlands:v:13:y:2024:i:4:p:418-:d:1363420
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    References listed on IDEAS

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    1. Peter MATANLE & Yasuyuki SATO, 2010. "Coming Soon to a City Near You! Learning to Live ‘Beyond Growth’ in Japan's Shrinking Regions," Social Science Japan Journal, University of Tokyo and Oxford University Press, vol. 13(2), pages 187-210.
    2. Masatomo Suzuki & Yasushi Asami, 2019. "Shrinking metropolitan area: Costly homeownership and slow spatial shrinkage," Urban Studies, Urban Studies Journal Limited, vol. 56(6), pages 1113-1128, May.
    3. Edward L. Glaeser & Joseph Gyourko, 2005. "Urban Decline and Durable Housing," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 345-375, April.
    4. André Sorensen, 2011. "Uneven Processes of Institutional Change: Path Dependence, Scale and the Contested Regulation of Urban Development in Japan," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 35(4), pages 712-734, July.
    5. Masaaki Uto & Masayuki Nakagawa & Sophie Buhnik, 2023. "Effects of housing asset deflation on shrinking cities: A case of the Tokyo metropolitan area," Post-Print halshs-03869690, HAL.
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