Will Olympics boost Japan's property market?

SINCE Tokyo was selected to host the 2020 Olympics, Japan has been riding a wave of elation. The Nikkei rose 2.5 per cent following the announcement, with construction stocks being the notable beneficiaries.

The Olympics boost came just in time. One year after Prime Minister Shinzo Abe's Abenomics was introduced, Japan's economy is seeing a revitalisation after more than two decades of stagnation.

In Q2 2013, Japan recorded positive GDP growth for the third consecutive quarter. The Property Business Confidence Index by the Land Institute of Japan also recorded positive numbers for all three segments (developer, brokerage and building management) for the first time since January 2007.

This is a good sign as it indicates that sentiment has returned to the pre-global financial crisis level. But the question remains whether the property market will generate enough interest from investors and whether the recovery in the sector is su…