PERE: We wanted to ask you about number six in your 2010 predictions – the one about Japan being the best-performing major industrialised market in 2010.
Byron Wien: Everyone is interested in that one. It’s the one I’m getting the most pushback on.
BW: No, I knew what I was getting into. There are only two types of criticism that I can’t handle in terms of my surprises: one, that it isn’t honestly a surprise and two, that it isn’t consistent with other things. If someone told me it was a crazy idea, that I could handle. If they say it isn’t a surprise or is inconsistent with the other ones, that cuts to the bone.
PERE: So why did you choose Japan?
BW: Japan’s surprise is a perfect example of an ideal surprise. Almost nobody thinks it so if I’m wrong, which I might be, the chance of me losing a lot of money isn’t very great because already everybody’s negative. They are very underweight in Japan.
PERE: As you say, a number of markets, real estate included, are down on Japan.
BW: They don’t think it has any favourable prospects. Obviously I do. Things are even getting better in Japan. There’s no question about it. Exports are improving, industrial production is improving. The numbers are still not good but they are not as bad as they were. If the yen weakens further, they could get better. Investors are so negative on it that if the thinking changes just a little bit, a tremendous amount of buying power could be introduced to the market.
PERE: What is underpinning these improvements you are witnessing?
BW: One reason is you have a new government in place and I think some of the policies of the new government are favourable to the economy. The government understands that previous stimulative plans didn’t work so they are try different things.
PERE: Do you see your prediction translate into real estate?
BW: I didn’t drill down that far but if the economy improves as I indicate it will, that is obviously good for real estate.