Posts tagged with japan

(III) Mipim2011 the World’s property market: analyzing topics

14 September, 2012 No Comments

In this second post I limit myself to make a synthesis of ideas presented in Dr. N.Roubini’s conference at MIPIM 2011.  Due to the length of the presentation, I focused on what might be more relevant for the real estate investor. Nonetheless, for those who want full details about the presentation, I included the full video in its original version in my previous post.

Core Observations:

1-The question that Dr. Nouriel Roubini arises: Can countries such as China and other emerging countries tighten their monetary policy and their exchange rate to reduce inflation and maintain economic growth in order to get a soft landing of the economy rather than a hard one?

The strength of the economies of the growing emerging markets encourages the risk of a higher inflation. In these markets, there is a clear economic overheating, excessive credit growth, and note that about two thirds of their consumption basket is: oil, energy, food and transportation

2 – A vivid example would be the current situation in the Middle East: What’s happening right now in the Middle East? Nobody could foresee the political movement that took place in early 2011. We don’t know if this is going to stabilize soon, or if it will spread to other countries. This can have an effect on oil and energy prices … In such case, what would be the consequences of higher oil prices?

* There will be a severe problem of inflation of the overheated emerging markets.

* A lower risk of inflation in developed economies since the recovery from the financial crisis is very slow

* It also has an impact on economic growth. Specifically a destabilizing effect in the investor and consumer’s confidence in particular…

3 – In recent years there has been a massive injection of liquidity into the global economy. There were massive fiscal stimulus in the US, Japan, Europe, and other emerging markets, but if we take a look at the current market (as of 2011) we realize that we are in the opposite side: there is less monetary stimulus and more fiscal austerity (countries in Europe and the UK started to cut on spending and tax incentives, as well as the US, who began to cut costs ….. The question is: Will the private market have the possibility to consume in order to have economic growth when some of the fiscal and monetary stimuli are gone?

Areas with potential growth: the U.S. at a 3%, some parts of Europe at a 1.5 to 2%, and emerging markets, eastern countries and South America at a 5-8% growth rate.


Turkey’s growth prospect is very optimistic for the medium to the long term. There is still growth in its population and as a consequence there is a significant domestic market (As a contrary, China’s population is decreasing). It can be a fast-growing economy although structural reforms need to be done. If these reforms are made at a regular pace, the forecast of growth for the future is very positive (real estate growth comes along).

Prices will increase reasonably which will improve Russia’s fiscal balance, and consequently its economic growth. However, the fact that Russia is not a very well-diversified economy prevents growth of being even greater. For example, in 2010 where there was a global economic recovery countries such as India or China grew at a 9% rate or Brazil at a 7.5%, but Russia instead, grew at a 4.5% rate.

Its current situation (as of 2011) is slow growth and a 2 digit inflation, and unless structural reforms are put in place to accelerate growth, the former will be slowed down. Even though Russia has great potential for growth given its vast natural resources, a good education system, and good scientists, there will be a direct relationship between what happens to oil prices and the growth of Russia. If oil prices rise the Russian economy will be stronger because it will improve the country’s economic balance. But, what should really be a concern is the long-term growth of their economy, and foreign investors are aware of it, and with it, aware of the risk of expropriation.


Currently there is an oversupply of existing houses. Home sales fell up to 80% of its highs, even though now are gradually increasing. However, home prices are still adjusted downward, inflation is present in the economy, unemployment is still high and people who are forced to leave their homes because they can’t pay their mortgages. Prices have adjusted by a 30%, but may have not bottomed out, and it might require a longer period of time for these adjustments to run out.


Fiscal austerity is urgently needed in the Euro zone, the UK and Japan. Even though a period of austerity is a “must”, it will have in the short term a negative effect on economic growth. Austerity means to cut on government spending, to fire public officials… but it will make the economic recovery more effective in the long run.

Japanese earthquake + Tsunami. NEW challenge for the anti-seismic architecture and engineering.

12 September, 2012 No Comments

Due to our profession, we deal on a daily basis with homes, buildings, plots etc, and it was easy to be touched by the enormous destruction that Japan suffered on March of 2011.

After the 8.9 magnitude earthquake that Japan suffered last year, the response of Japanese architecture has been astonishing. Today Japan has the best buildings in the world to withstand possible future earthquakes. These buildings have been designed in such manner that allows them to absorb the vibrations, replacing a sudden movement with a more balanced swing. Many years ago, Japanese homes were built from bamboo and rice paper which, during earthquakes, allowed them to swing instead of cracking. And even if the homes cracked, they were easier to repair and at a lower cost.

This is a brief summary of the earthquake-resistant architectural features used in Japan:

Shigeru Ban (Tokyo 1957) is an architect and consultant to the United Nations who builds shelter for the UN in disaster zones. He emphasized in an interview (in Spanish Newspaper “EL PAIS” 03/20/11) that no building built after 1981, when construction laws were amended, had collapsed during or after the earthquake. Ban states that earthquakes are not what causes so many people to die, it’s the consequences of it, in other words the building’s debris when they collapse. He also added that, after the tsunami, it would be wise to modify the cities’ urban plans and build brick buildings of at least four stories high by the coasts, in order to function as a protective wall in case of future tsunamis.

For the half a million people who were temporarily sheltered in athletic stadiums for months until temporary homes were ready, the government installed a system based on hard cardboard tubes and paper to create individual spaces. With this structure, families intend to dissipate a reality, that is, psychologically very hard to accept; the lack of privacy.
What is the Japanese anti-seismic architecture about?

Basically, the buildings’ structures are highly reinforced performing a vertical weight distribution, in other words, the lower floors support more weight. The broader the base of the building, the stronger it will be during an earthquake.

The buildings are symmetric and elastic to better absorb the ground’s vibration. The law requires a separation of several inches between the medians of the blocks to allow buildings to move but without  hitting each other, thus avoiding the domino effect between buildings. Mr. J.Garcia Rodriguez, PhD in Architecture from the University of Navarra, compares the behavior of a building under a seismic action to that of a whip when swung. In this comparison, the earthquake would be the hand that moves the whip, and the building is the whip spreading the earthquake’s energy. To deal with this uncontrolled movement, Japanese architecture proposes two solutions:

1-An architecture based on a small number of floors. These buildings are built with rigid structures that resist the impact with little deformation, thus the earthquake’s impact is smaller.

2 – However, in taller buildings, they choose to build more flexible structures. They are designed to oscillate laterally (as the whip would) in a safely manner without major damages. Steel is used in these structures, as it is highly resistant and ductile.

Down below I’ ll give you some highlights on the Japanese housing market as of 2011:

* From 2007 and on, housing prices began to rise out of control due to the increment in prices of building materials as those materials ought to be able to withstand frequent earthquakes. Buildings should be no more than 30 years old, so as a consequence rental prices also soared in recent years. The value of Japanese homes ​​varies depending on the land it is built.

* In Japan the magnitude of a house is measured in tatami, equivalent to 1.6 square meters (from now on m2) approximately. The average dwelling size is usually 90 m2 (3-4 bedrooms) and home of more than 100 m2 is considered a luxury. In general, Japanese people prefer buying a home than renting it, but due to the high prices not everyone can afford it, the main reason for their high index of young and elderly adults living with relatives. However, there is still the opportunity for one to live independently. There has been a curious form of housing: people who cannot afford to either purchase a home or to rent it, can sleep in Cyber Cafes, in which for only 10€ are entitled to a small room with a sofa, TV, and a computer with internet connection.

* It is a real estate market, in which there are almost no legal restrictions for foreign investors to buy property in Japan.

***** Two weeks onset of the earthquake and the subsequent tsunami that devastated part of the country, with 27,000 casualties between deaths and missing people, plus the nuclear crisis (more updated info in International Atomic Energy Agency, www.iaea. org, Spanish Embassy in Tokyo) had the international community very aware of Japan. We felt for the Japanese, …. and we shall remark what an example of organization and integrity in such a moment in their lives they were for the rest of us. Following in this tonic, I wanted to make a post, (avoiding catastrophic images) with the intention of highlighting the human effort made in the form of anti-seismic architecture to counteract the continuous devastating effects of the earthquakes affecting the country, thereby preventing an even higher number of victims.

From here, I wanted to convey solidarity and support to the Japanese people and their victims.

I include links to press reports during the later days of the catastrophic events:

Jean Nouvel’s Architecture – Pritzker Prize

19 August, 2011 No Comments

-Agbar Tower- Barcelona, Spain.

The tower is illuminated with thousands of LEDs (light emitting diodes) synchronized.

These LEDs create an interesting color effect such as Blau-Grana (blue and maroon), among the many other possible combinations, since this system allows to use multiple colors while consuming 80% less energy than conventional bulbs do.

- The new National Museum of Qatar, in the Middle East, presents a design that follows the lines of the natural stone referred to as the desert’s rose stone. Within the new design he incorporated the old museum. The Museum, currently under construction, is scheduled to open to the public in 2013.

The Pritzker Architecture Prize rewards architects who show, through their projects, great creativity and who build functional and high quality construction buildings, thus contributing to enrich humanity.

Among the architects who receive this annual award presented by the U.S. Company HYATT, we find Jean Nouvel (France 1945) who was awarded with it in 2008.

Mr Nouvel welcomes every new project without any preconceived ideas, which is why each of his works differs from his previous projects. However, there are common elements throughout his work such as transparency, light and shadows, and the search for the harmonious integration of his work with the surrounding environment.