On May 2nd, Joe Biden now famously included Japan in his list of countries with economic growth issues due to “xenophobia”; his reason for low immigration in the countries listed.
Japan has since stated the President’s remarks as “regrettable” which is the Japanese version of massive outrage.
While Japan’s falling demographics are widely known, Japan visa holders are at an all-time high as well as inbound tourists, mainly met with welcoming Japanese arms.
Screenshot taken from below TLDR YouTube video; data originally provided by the PEW Research Center.
One can argue Japan is being careful with immigration because one look at other developed countries known for their pro-immigration stance can reveal that simply adding people doesn’t automatically mean increased per-capita productivity.
Why does productivity matter to Japan residential real estate? Increased productivity means rising wages which means households can affordably borrow more to buy property.
Also, rising and falling demographics are directly linked to demand; higher demand areas mean higher prices and rents and vice versa.
Links to data presented in above video found in comments section on YouTube.
Comparing Japan to the United States wouldn’t be accurate as the US dollar is the world’s reserve currency thus putting America at an unfair advantage.
A more apt comparison could be made between Japan and this author’s native land, Canada.
Neither country’s currency is world reserve, both have developed economies with highly concentrated populations in select urban centers.
Japan and Canada are on the opposite ends of the immigration spectrum and as Canada’s case shows, high immigration with lax policies can create a slew of other economic issues.
Japan must continue to increase immigration, this much is certain. As the increase continues, so will positive effects on property prices over the long term.
Exactly how the nation continues to go about it remains to be seen but, as with all things Japan, policy will be decided only after thoroughly detailed study of what went right and wrong in other countries.
Further Reading:
Japan is not a xenophobic country (Noahpinion Substack quoting PEW Research Center amongst others)
Around the World, More Say Immigrants Are a Strength Than a Burden (PEW Research Center)
