These reports on Japan show the cyclical nature of real estate booms. "Japan is entering its fourth year of robust economic growth and has an unemployment rate of 4.1 per cent, the lowest since 1998. Unlike previous, short-lived recoveries fuelled by government spending, the upward trend now is based largely on slimmed-down companies posting record profit and returning to a cycle of hiring."

"With Tokyo real estate prices rising in 2005 for first time in 15 years, Kazuhiro Takeshima's home-construction business has rebounded too, allowing him to reward his staff with raises. 'There is a sense that we're back in business, that things are good in Japan again,' said Mr Takeshima. 'It makes us all feel a little more confident about opening our wallets to spend.'"

"That chain reaction of spending, from houses to cars to sneakers, heralds what economists call the long-awaited return of Japanese consumers."

"Unlike most nations, where prices rise with inflation each year, Japan has been locked in seven years of price declines, or deflation, as gloomy consumers and sceptical businesses put off purchasing, expecting that prices would continue to fall. The drag on the economy forced some companies to cut payrolls, creating what many feared would be a cycle of constantly falling prices."

"Takuya Wakizawa recently took the plunge into home ownership. 'I started seeing mortgage rates going up, and I realised I couldn't wait any longer,' said Mr Wakizawa, who locked in a 35-year fixed mortgage for a two-bedroom Tokyo apartment at 2.62 per cent last summer. Rates for similar loans have since risen above 2.8 per cent."

"'My generation never used to think that prices would get higher. We became used to things getting cheaper and cheaper,' said Mr Wakizawa, who also splurged on two rooms of American-made Ethan Allen furniture and a Japanese flat-screen television. 'But prices are going up and it makes you feel like you can't afford not to buy now.'"

"The number of condominiums put on sale in the Tokyo metropolitan area in March rose 13.4 percent from a year earlier to 7,596 units, the first year-on-year increase in five months. In Tokyo's 23 wards, 2,924 condos were put on the market, up 53.4 percent from a year ago."

"The Bank of Japan said Wednesday it will keep a close watch on real estate loans of banks and securities companies as it monitors the country's financial system in fiscal 2006. In its annual report, the BOJ hinted at a need to forestall the possibility of an asset price bubble by enhancing the risk-management practices of financial institutions, given that commercial land prices in some areas of Tokyo have recently risen sharply."

"But the central bank stressed it has no intention of strictly monitoring lending to the real estate sector."