Credit Suisse Group AG said that property manager Nomura Real Estate Holdings operations are improving. Analysts said that the company's condominium, investment and brokerage operations are outperforming expectations.
And Japan's export slump eased in April, adding to optimism as it is regarded as a sign that the government's stimulus measures are working.
Analysts shrugged off a Land Ministry report that said property prices dropped in almost all major Japanese cities in the three months to April 1. A separate report from the ministry said mergers and reorganization will be necessary among real estate investment funds, sparking a rally in shares of developers.
'I'm bullish on the real estate industry. Statistics such as land prices are trailing indicators,' said Wing Asset's Haga.
Shares in the Mitsui Fudosan Company, whose affiliate manages Japan's biggest real estate investment trust, in the Mitsibushi Estate Company and the NTT Urban Development Company are all improving.
Japan may outperform other markets over five years, according to Marc Faber, the investor who publishes the Gloom, Boom and Doom report. 'Of all the regions in the world, Asia is still the most attractive by far,' he said.
This sentiment can be seen elsewhere in the region. A wave of money flooding into Hong Kong from mainland China and the rest of the world has injected optimism into the property sector.
The Hong Kong government predicts the economy will shrink up to 6.5% this year and unemployment is at a three-year high but residential property prices are up about 13% this year.
Hong Kong's real-estate market may be one of the more pronounced beneficiaries of a global effort by governments to print money and stimulate lending, it is felt. Quantitative easings by central banks in the US, Europe and Asia have created booming capital flows that are swamping some markets, according to Sean Darby, a Hong Kong-based strategist for Nomura International..
Aggressive pricing by Hong Kong mortgage lenders and a limited supply of new apartments here also have helped property prices take off. An on mainland China Beijing's stimulus measures are bumping up property prices.
