An interesting element of the Japanese housing market system that is worth considering in terms of its impact on the housing market is the savings rate and savings behavior in Japan. Traditionally, the savings rate in Japan is high, with a population that is risk averse and tends to invest in instruments that have lower returns, but are also less risky. With that in mind, Noguchi and Poterba (1994) tend to support the idea, first of all, that the conditions of owned houses differ from those of rented houses, in that they are especially more spacious and with overall better amenities.

Second to that, there appears to be a clear relationship between geographical location and wealth accumulation, as determined by the savings levels in different regions. Households in larger conurbations, such as Tokyo, accumulated wealth at a more accelerated rate than households in the countryside. There were several reasons for this, but they relied especially on a higher savings rate and on the greater rate of appreciation for their properties, directly influenced by the area they were living in.

Finally, wealth distribution is also an issue for modern Japan, with a distinct impact on the housing market as well. The socio-economic differences between individuals owning land and houses and those who don't have become significant over the last years.

5. Tsunami, earthquake and real estate

As it has already been mentioned, the Japanese real estate market has not been dramatically impacted by the internationalized economic crisis. Nevertheless, at the beginning of 2011, it was hit by a tsunami and an earthquake, which threaten economic stability.

"A 9.0-magnitude earthquake and an ensuing tsunami devastated the northeast coast of Honshu Island on 11 March 2011, washing away buildings and infrastructure as much as 6 miles inland, killing thousands, severely damaging several nuclear power plants, displacing and leaving homeless more than 320,000 people, and leaving a million households without running water. […] In order to stabilize financial markets and retard appreciation of the yen, the Bank of Japan injected more than $325 billion in yen into the economy. Estimates of the direct costs of the damage - rebuilding homes and factories - range from $235 billion to $310 billion. Some economic forecasters, who previously had anticipated slower growth for Japan in 2011, now believe GDP may decline as much as 1% for the year."

At a general level, the natural catastrophe is problematic as it generated the need to invest substantial resources in the reconstruction of the country. But despite the destructions, the Economics News Paper indicated that the Japanese real estate sector remained "robust." In this order of ides, at the level of the property market, it could be said that such a situation creates an increased need for building, creating as such a demand for the industry as well as numerous employment opportunities. The long-term impact has nevertheless yet to be observed.

6. Conclusions

The current endeavor has focused on the analysis of the Japanese real estate market. The initial question at the basis of the research was represented by the realization that the Japanese property market was impacted by the internationalized financial crisis to a smaller degree than other real estate sectors...

It is now argued that the initial assessment of the increased stability of the Japanese real estate sector is valid. Furthermore, the resilience and stability of Japanese property markets was the result of the combination of multiple forces, such as a generally prudential nature of the people and the regulations, the lessons from the 1990s overvaluation of the assets or the very systems in the real estate market.
There are several interesting issues that this paper, based on Yukio Noguchi and James Poterba's book "Housing Markets in the United States and Japan" has pointed out to. First of all, land and house prices remain extremely high in Japan. Even more so, house prices are particularly determined by specific elements. One of the important one is the size of the lot. Due to the conditions, plots tend to be small, which impacts on the conditions of housing and living.

Another is the location of the plot. Distance from and to work is an important element that plays into the way price is determined on the housing market in Japan. People who are less willing to sacrifice their time for longer trips to work will also save on the amount of money they pay for housing, mainly because the respective additional time and effort is equivalent to an opportunity cost they are willing to pay.

The level of savings in Japan is an interesting element that also ties into the housing market. Traditionally, Japanese are conservative when it comes to savings and investments, which translates both into high levels of savings and into investments with lower returns and lower levels of risk. This aversion to risk allowed the Japanese housing market to be less affected by the global economic crisis and housing market crisis than other countries in the world. The earthquake and tsunamis had a tremendously negative impact, however, on the development of the market.

Overall, the Japanese housing market is one where price remains consistently high, with risks such as earthquakes and tsunamis making this a risky investment. In the medium and long-term, however, investment in real estate and on the housing market has proved to significantly increase the wealth of the household.