Note 1-66

(66) Incidentally, estimating starts of owned houses by using the growth rate of land prices that indicate future house prices as an explanatory variable in addition to the owned house acquisition capability index and the unemployment rate of householders suggests that a rise in unemployment rate and an anticipation of a fall in house prices hold down starts of owned houses (See Appended Note 1-9). As for the asset price deflation caused by a fall in land prices, though it will raise housing acquisition capability, the anticipation of an asset deflation will postpone house purchases. Moreover, the deterioration of balance sheets caused by the asset deflation, coupled with sluggish income growth, would restrain purchases of houses by second home buyers.