As investor confidence lowers in correlation to the rest of the world, there has been a noticeable slow-down in the Japanese property market. Rents which have been soaring in Tokyo for some years now are finally slowing down. There has been uncertainty in the market generally, with most investors going for low risk and low return investments. Shares and property have flooded the market for some time now, and large foreign investment firms are picking up the pieces.

There have been recent drops as high as 54% over six months in the real estate sector, as measured by the Nikkei index in Japan. The Nikkei average has dropped by around 33% over the six months after last year's record highs.

Investor sentiment in Japan is very uncertain, with many investors returning to low risk traditional investments like bank deposits and government bonds. They are also looking overseas to place their money, having little confidence in the market's ability to pull itself up in the near future. The Japanese yen has also fallen drastically.

Perhaps the most plain expression of investor sentiment is a recent Reuters poll, which ranks investor feelings monthly. The score in January was minus 60, the lowest one since the inception of the poll. This was only slightly improved upon in February. These results are all generally attributed to the US subprime crisis and credit crunch.

All this negativity from local investors creates high numbers of sales and a sluggish property market. Experts in property management in Japan say that there have been record numbers of properties on the market and sales have been especially slow. However, as the divide between the 'have's and the 'have-not's grows wider, those who still have a surplus of funds are able to buy record amounts of property at extremely low prices.

GE Real Estate is one such company. A spokesman, Tomoyuki Yoshida, said of the current market conditions in Japan: ''The market is favourable to GE. Small to medium sized fund managers have a huge issue about getting financed. They have to dispose of a lot of properties."

The property arm of a major real estate company is preparing to acquire around $10 billion worth of real estate in Japan this year, in anticipation of the current market conditions continuing. The credit crunch is set to continue (along with its impact on the Japanese economy), the cost of borrowing will increase, and Japanese real estate trusts will have to sell up at quite low prices to be able to survive. All this makes GE, and other large firms, able to gain record numbers of properties at excellent prices.

However, there are some that are happy about the falling prices on the property market in Japan. Renters in Tokyo have traditionally been stung by some of the highest rents on the planet, along with such enormous metropolis' as London and New York.

In some neighbourhoods, rents last year increased by up to 20%, with several experiencing 10% gains. However, the market slowdown should mean a correction in the price of rents is looming, providing welcome relief for lessees.

As always, there are winners and losers in property markets and economies. Currently in Japan, large firms have been able to take advantage of their position, and renters are also experiencing budgetary relief.