The possibility of securitization system of real estate market in Japan

Abstract

Although it will take time, a new financing method, securitization, will help supply the real estate market with direct investments and expand capital available to finance real estate, which would stimulate the real estate market and the Japanese economy. However, examining the experience of securitization in the U.S. make it clear that to achieve this goal, there are still many problems to be solved regarding Japan's financing system, including non-recourse system, tax issues, disclosure matters, appraisal methods and the establishment of the secondary market. Not only investors' actions but also the government's actions will decide the success of the securitization in Japan. Its success depends on the diversity of securitization products, which attract many kinds of investors, and the growth of the infrastructure of the securitization market. The above problems will be solved step by step. The facilitation of governmental institutions for securitization is necessary to expand it in Japan faster. If these factors are resolved, the securitization system will revive the real estate market in Japan and make the market a totally different one.