With the closing of a successful Winter Olympics in PyeongChang, the spotlight has now turned towards the Tokyo 2020 Summer Olympics. 

The first Olympics held in Tokyo in 1964 marked the beginning of a new era for Japan after World War II, preceding the Izanagi economic boom (1965-1970) that made the country the world’s second largest economy. Although Japan fell into a long bout of economic stagnation after the asset bubble burst in the early 1990s, the country is currently experiencing its second longest postwar economic recovery. 

Nominal GDP reached JPY545 trillion in 2017, a JPY57 trillion or 12% increase from 2011. Corporate profits have been steadily growing and continue to set new highs.

Demographic shifts are driving the population into cities, including an expanding foreign workforce that mitigates a severe labour shortage and contributes to the economy. 

A series of nation-wide infrastructure improvement and large-scale redevelopment projects towards and beyond the 2020 Tokyo Olympics should have a positive influence on the real estate market in the long term. Macroeconomic and
demographic trends are driving demand for real estate and encourage continuing development, especially in key cities. The Olympics could be a stage to showcase a new Japan and set the country on a resilient growth track.

Expansion of tourism is likely to continue, benefiting large cities - as well as regional economies - as more overseas tourists visit cities beyond Tokyo and Osaka.

The real estate market is also strengthening, as reflected in extremely tight office vacancy and slow but steady rental growth. Massive redevelopment projects are making Tokyo and key regional cities more attractive and accessible.

The 2020 Olympics could mark the beginning of a new resilient growth period for Japan, just as the 1964 Olympics did over 50 years ago.  

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