Real Estate Industry Japan

Goldman, Sachs & Co. plans to buy as much as $3.86 billion in bad loans from Japanese banks in a bet that the Japanese real estate market will rebound, Nikkei English News reported. The New York-based firm expects property prices, which have fallen 74% in Japan's biggest industrial areas since 1990, to hit bottom soon and begin a recovery, the news service said. The move comes as the Japanese government's efforts to deregulate financial markets create broader opportunities for U.S.

When Takashi Kitaguchi, a 45-year-old businessman, paid over $1 million for his modest home in a suburb near Kyoto two years ago, he assumed that he had made a safe investment. After all, as far back as he could remember, land prices had never fallen. Nine months later, however, builders were selling similar units in the same development for 40% less. A stunned Kitaguchi joined 14 other owners in the area to sue for a refund.

Keep an eye on the fairways for a hint at where Japan's volatile financial markets are heading. Like the proverbial canary in the coal mine, Tokyo's speculative market in golf club memberships started losing ground last fall after soaring upward for as long as anyone can remember.

Mitsuo Kon and his wife have talked of buying a new home for the past few years. This month, they decided the time had come to make a move. They found a "bargain"--a 1,000-square-foot, $567,000 condominium under construction 45 minutes by train from downtown Tokyo. "Prices are cheaper than two or three years ago. It looks like it's affordable for us," Kon, 56, said after filing an application to buy the unit.