Abstract
The advent and collapse of real estate bubbles, or the sharp rises and falls in real estate prices, have posed major economic issues in many contries. Real estate prices soared sharply in Japan and Sweden in the 1990s and recently in many Western countries （until the mid─2000s）, until plunging in the wake of the financial crisis in the United States. The rapid rise and fall of real estate prices in Japan from the mid-1980s to the 1990s is said to represent the most significant real estate bubble of the 20th century. Following the collapse of this bubble, Japan experienced a long period of economic stagnation, often cynically described as the“l ost decades.” What have we learned from these ups and downs in the real estate market? Have recent real estate investment risk management efforts incorporated these lessons? To answer these questions, this paper would like to pay attention to the severalty of each real asset. The lesson learned from last century's economic bubble and from the expansion and shrinkage of the real estate market in the wake of the latest financial crisis is that real estate investment risks cannot be dispersed by diversifying investments, and major risks will remain unless assets are carefully selected.
