IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-04533540.html

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

    (Tokyo City University)

  • Sophie Buhnik

    (ESPI2R - Laboratoire ESPI2R Research in Real Estate [Paris] - ESPI - Ecole Supérieure des Professions Immobilières, GC (UMR_8504) - Géographie-cités - UP1 - Université Paris 1 Panthéon-Sorbonne - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité, IAO - Institut d'Asie Orientale - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UL2 - Université Lumière - Lyon 2 - IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

  • Yuki Okazawa

    (Mitsubishi Research Institute, Inc.)

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," Post-Print hal-04533540, HAL.
    • Handle: RePEc:hal:journl:hal-04533540
    DOI: 10.3390/land13040418
    Note: View the original document on HAL open archive server: https://hal.science/hal-04533540v1
    as

    Download full text from publisher

    File URL: https://hal.science/hal-04533540v1/document
    Download Restriction: no
    File URL: https://libkey.io/10.3390/land13040418?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ohtake, Fumio & Shintani, Mototsugu, 1996. "The effect of demographics on the Japanese housing market," Regional Science and Urban Economics, Elsevier, vol. 26(2), pages 189-201, April.
    2. 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.
    3. 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.
    4. 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.
    5. Yoshihiro Tamai & Chihiro Shimizu & Kiyohiko G. Nishimura, 2017. "Aging and Property Prices: A Theory of Very-Long-Run Portfolio Choice and Its Predictions on Japanese Municipalities in the 2040s," Asian Economic Papers, MIT Press, vol. 16(3), pages 48-74, Fall.
    6. Liu, Yudi & Nath, Nabamita & Murayama, Akito & Manabe, Rikutaro, 2022. "Transit-oriented development with urban sprawl? Four phases of urban growth and policy intervention in Tokyo," Land Use Policy, Elsevier, vol. 112(C).
    7. 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.
    8. 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.
    9. Hiroaki Ohashi & Nicholas A Phelps, 2021. "Suburban (mis)fortunes: Outer suburban shrinkage in Tokyo Metropolis," Urban Studies, Urban Studies Journal Limited, vol. 58(14), pages 3029-3049, November.
    10. Yoshihiro Tamai & Chihiro Shimizu & Kiyohiko G. Nishimura, 2017. "Portfolio Choice and Its Predictions on Japanese Municipalities in the 2040s," CARF F-Series CARF-F-404, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Suzuki, Masatomo & Asami, Yasushi & Shimizu, Chihiro, 2021. "Housing rent rigidity under downward pressure: Unit-level longitudinal evidence from Tokyo," Journal of Housing Economics, Elsevier, vol. 52(C).
    3. Chihiro Shimizu & Yongheng Deng & Tomoo Inoue & Kiyohiko Nishimura, 2024. "Demographics Outlook, Credit Conditions, and Property Prices," Working Papers e198, Tokyo Center for Economic Research.
    4. Masahiro Higo & Kiyohiko G. Nishimura & Yukie Sakuragawa, 2020. "Reforms and Crises in Government Statistics: The Case of Japan," Asian Economic Papers, MIT Press, vol. 19(2), pages 21-37, Summer.
    5. Diabul Haque, 2024. "Transforming Japan Real Estate," Papers 2405.20715, arXiv.org.
    6. Eric Monnet & C. Wolf, 2016. "Demographic Cycle, Migration and Housing Investment: a Causal Examination," Working papers 591, Banque de France.
    7. Kohei Kawai & Masatomo Suzuki & Chihiro Shimizu, 2019. "Shrinkage in Tokyo’s Central Business District: Large-Scale Redevelopment in the Spatially Shrinking Office Market," Sustainability, MDPI, vol. 11(10), pages 1-17, May.
    8. Masatomo Suzuki & Yasushi Asami, 2020. "Shrinking housing market, long-term vacancy, and withdrawal from housing market," Asia-Pacific Journal of Regional Science, Springer, vol. 4(3), pages 619-638, October.
    9. Monnet, Eric & Wolf , Clara, 2017. "Demographic cycles, migration and housing investment," Journal of Housing Economics, Elsevier, vol. 38(C), pages 38-49.
    10. Hartwick, John, 2013. "The Law of Urban Growth and the Local Public Sector," Queen's Economics Department Working Papers 274624, Queen's University - Department of Economics.
    11. Hans R. A. Koster & Jos N. van Ommeren & Piet Rietveld, 2016. "Historic amenities, income and sorting of households," Journal of Economic Geography, Oxford University Press, vol. 16(1), pages 203-236.
    12. Adam Jakubik & Victor Stolzenburg, 2021. "The ‘China Shock’ revisited: insights from value added trade flows," Journal of Economic Geography, Oxford University Press, vol. 21(1), pages 67-95.
    13. Edward L. Glaeser & Joseph Gyourko, 2006. "Housing Dynamics," NBER Working Papers 12787, National Bureau of Economic Research, Inc.
    14. Mark D. Partridge & Dan S. Rickman & M. Rose Olfert & Ying Tan, 2015. "When Spatial Equilibrium Fails: Is Place-Based Policy Second Best?," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1303-1325, August.
    15. An-Ming Wang, 2016. "Agglomeration and simplified housing boom," Urban Studies, Urban Studies Journal Limited, vol. 53(5), pages 936-956, April.
    16. Wouter Vermeulen & J. van Ommeren, 2006. "Compensation of regional unemployment in housing markets," CPB Discussion Paper 57, CPB Netherlands Bureau for Economic Policy Analysis.
    17. Jordan Rappaport & Jeffrey D. Sachs, 2001. "The U.S. as a coastal nation," Research Working Paper RWP 01-11, Federal Reserve Bank of Kansas City.
    18. Miles M Finney, 2017. "Air Quality and the Development of Los Angeles," The Review of Regional Studies, Southern Regional Science Association, vol. 47(3), pages 271-288, Fall.
    19. Edward L. Glaeser, 2021. "Urban Resilience," NBER Working Papers 29261, National Bureau of Economic Research, Inc.
    20. Duranton, Gilles & Puga, Diego, 2014. "The Growth of Cities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 781-853, Elsevier.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-04533540. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.