Nominal House Price Index

Nominal House Price Index

The Nominal House Price Index is an important economic indicator that tracks changes in housing prices over a given period. This index uses 2015 as the base year (100) and shows the degree of housing price fluctuation thereafter. It is designed to reflect the overall price level of the market, including both new and existing housing.

There are multiple reasons why this indicator is important. First, the housing market represents a large share of the overall economy in many countries and directly impacts consumer asset values. Rising or falling house prices affect household consumption behavior and savings inclination, ultimately influencing overall economic sentiment. Furthermore, it has ripple effects on financial institutions' lending decisions and mortgage markets. Additionally, it serves as an important reference indicator for policymakers in evaluating the effects of monetary policy and housing policy.

Japan's housing prices have generally been in a declining trend since the collapse of the bubble in the 1990s, but shifted toward an upward trend from the late 2010s due to the planned Tokyo Olympics and increased inbound demand. The widening gap between urban and rural areas is also noteworthy. In addition, fluctuations in purchasing power accompanying changes in interest rate environments and structural supply-demand changes due to declining households and aging populations are also important factors. By continuously monitoring this indicator, early detection of overheating or cooling in the real estate market becomes possible.