And at the same time, market expectation was that monetary easing would continue and the policy rate would remain low for a substantial period. This combination of elevated investment-return expectations and market expectation of continuously low policy rates accelerated property investment, both residential and commercial, though especially the latter. Property investment is a long-term, irreversible investment.
It is a lengthy process from starting to find a lot to final dedication, and once built for a particular purpose, it is difficult to change usage. This is especially important in Japan, where some urban redevelopment may take years. Thus, not only the current policy rate but also the expectations of its future course have a significant effect on investment decisions.