Real estate crisis in Japan: Economic impact and policy implications for Vietnam

Abstract

This article analyzes the key economic consequences of the real estate crisis in Japan in the
early 1990s, including prolonged stagnation, systemic financial instability, and a significant decline in
consumption and investment. By tracing the formation and evolution of the crisis, the article clarifies the
relationship between the collapse of the real estate market and the overall deterioration of the Japanese
economy, with widespread spillover effects across multiple critical sectors. The crisis not only impacted
short-term growth but also fundamentally transformed Japan’s economic development model for more than
two decades thereafter. Based on this analysis, the article draws several practical implications for Vietnam,
where the real estate market is currently experiencing rapid expansion but exhibits underlying
vulnerabilities that may pose risks to macroeconomic stability and long-term growth if not properly
addressed.