The determinants of residential property prices in Japan: Analyses of different monetary policy regimes

Residential property prices in three regions in Japan are influenced by stock price, but not by interest rate, in the first period of sample period, from April 2008 to March 2013 The wealth effect from stock to the real estate market holds. The sensitivity of interest rates to residential property markets is not confirmed. Furthermore, the monetary policy adopted by the Bank of Japan (BOJ) is not as strong in the second period. Residential property prices are influenced both by stock price and interest rate in the second period, from April 2013- to August 2019. The wealth effect from stock to the real estate market holds. The aggressive non-traditional monetary policy enacted by the BOJ flattens the yield curve of long-term interest rates. Comparing the impact of stock price and interest rate in the three regions under study, Tokyo enjoys the greatest effects.