Categorized | International

Japanese Bankruptcies Expected to Rise in 2012

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Japanese real estate companies are expected to have a very difficult year in 2012. More than five hundred property companies may declare bankruptcy in the near year. If the predictions are accurate, it will be the third straight year during which bankruptcies of property companies have increased.

The rising number of bankruptcies among property companies can be attributed to a number of factors, though the biggest may be the actions taken by Japanese banks to cut back on riskier loans. The cut backs by Japanese banks largely stem from fears that the United States economy and the European debt problems will get worse. As such, many developers are being denied loans that they may have once received in the past.

Because financing is so critical when it comes to real estate companies, small property firms are struggling to stay afloat with the cut backs. The larger property developers and real estate firms, on the other hand, are thriving, and taking control of the market. Seven real estate firms own more than half of the residential rental market. That number is up from just twenty percent three years ago.

There is some concern among real estate analysts that the market will suffer serious consequences, as lending cut backs essentially eliminate healthy competition. There is no clear indication as to what negative effects will be brought on by the lack of competition, though analysts are adamant about their concerns. They believe that additional fees may be added to closing costs, and that some buyers may be turned away without legitimate reason.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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