Two things rarely mentioned about Japan:
1) Japan's population is declining. There is almost no immigration, and Japan is neck and neck with Italy as the fastest aging populations because of so few kids, and
2) Japan has had little to no wage growth since the bubble burst. I'm getting this from anecdotal evidence like talking to people in Japan and non-academic sources like yahoo news and so on. Part of what gives a buyer confidence to take up what seems like a gigantic amount of mortgage debt is that in time, they will make higher wages. What allows people to buy more and more expensive (nominal prices) property is rising wages and therefore ability to service more debt. In Japan, they have no expectations of higher wages, and the uncertainty of the economy gives people no confidence to buy because they might lose their job.
A country with a declining population, no wage growth and slips in and out of recession won't have rising property prices, especially when you consider how big Japan's bubble was. After 20 years of stagnant growth and wages, Japan still has some of the highest per capita wages in the world. After 20 years of crashing prices, and roaring prices everywhere else, Tokyo is still expensive relative to TODAY's prices. That gives an indication of just how crazy it got back then.
A country with increasing population, wage growth and decent (if not strong) economy growth, on the other hand......... put it this way, if Australia goes into a long term population decline, long term wage stagnation and economic recession, then property will crash.
