The trend of investing in real estate to ensure a steady return and secure a future income has held in most advanced economies for generations. Yet, the tide is turning. After the financial crisis in 2008, the housing marketing in the Americas, Northern Europe and some countries in Asia have left climbing the property a distant dream for many.
However, Japan presents a safe and accessible housing market. Its low property prices and high yield are unmatched.
Understanding Japan’s Safe Haven
Japan has held the title of the “world’s largest creditor” for years now. This begs the question then, why should someone invest in a country with so many outstanding debts owed? Quite simply, because the value of foreign assets held by Japanese investors is significantly larger than the value of Japanese assets owned by foreign investors. Net foreign assets were at 78.8 trillion yen at the end of 2019, which makes Japan both the largest creditor nation and most indebted nation. Suffice to say, although currency may fluctuate the market is unlikely to crumble anytime soon!
In fact, the property market has been steadily on the rise for the past 11 years, with the Ministry of Land, Infrastructure, Transport and Tourism reporting the fastest climb in property prices in 2018.
Young Investors Discover Japan Real Estate
For those struggling to find a worthwhile investment in Europe and the Americas, Japan presents the opportunity to set-up a stable rental income. Instead of relying on speculative capital growth projections, you have assured a steady income from a thriving rental market in Japan’s popular tourist and metropolis centres.
What’s on the Market?
Property investors can find most to suit their preferences and budget in Japan and with climbing foreign investment, there are plenty of options for apartment buildings and commercial properties throughout Japan with typically rental yields varying from 3% to 10%.
Tokyo is a hotspot for both foreign and domestic investment with the upcoming Tokyo Olympics in 2021. As it stands, properties in this area can expect a 6% yield and properties on the market are likely to sell within a few days – this trend isn’t expected to slow down soon either!
Yet investors who fail to look outside Tokyo will miss out on the most promising of Japanese markets. The northern reaches of Japan experienced a rise in residential land prices of 50% and commercial land prices also increased by an astounding 58.8% in 2018. Why? Because the Hokkaido region is internationally recognised as one of the best ski destinations in the world. That, combined with the proposed extension of the bullet trains and increasing air routes to the area has elevated Hokkaido to the international stage.
Investing in Hokkaido
International hoteliers have already started to invest in Niseko – one of the primary ski resorts in the area. The Park Hyatt Niseko opened in December 2019, The Ritz Carlton opens in December 2020, with the Hilton the first branded hotel in Niseko, along with W hotel & Aman also with plans to develop hotels in the area in the coming year as seen in the C9 Hotel Report on Niseko.
Despite being dubbed the “Aspen of Asia” this area is not quite as expensive to invest in as it first appears. Compared to its European and American counterparts, the price per square metre comes in at some 30% below. Properties such as SnowDog Village , SnowDog Chalets & Raku Ichi Residences offer the opportunity to invest in properties at the middle-tier of the market with an assured yield. Their sleek yet functional apartments are perfect for families or for groups of friends whether to rent out or for personal use.
Language and Cultural Barriers
Of course, Japan has its unique language and culture that it has retained for centuries. A culture that differs dramatically from that of the west sometimes. When it comes to buying a property some steps cannot be missed out.
That’s why we have put together this guide to buying a property in Japan - 10-steps to buying a property in Japan. Plus, here at JNW properties, we are experienced in guiding investors through the purchase process – it comes with the territory.
Get in touch with us to find out more about our investment in Japan or our current properties.