Japan: land of the rising market
For Asian investors, Japan appears to be the next property hotspot, and agents from both home and abroad are aiming to cash in
After nearly a quarter of a century of stagnation, the Japanese property market is heating up. Whether a result of Abenomics – the stimulus package implemented by Prime Minister Abe in the past 18 months – or the awarding of the 2020 Olympics to Tokyo, or just a natural return to growth, Chinese and Singaporean investors are flocking to property websites and buying up Japanese apartments.
The Taiwan Realty Co opened its first branch in Tokyo yesterday and says it will open another in Osaka within a year. Moreover, the company say they will be marketing property in Tokyo through their Los Angeles, Kuala Lumpur and Vancouver branches, a spokesman told the Focus Taiwan news channel. Taiwan Realty’s president Kevin Peng said that Japan’s rate of return, at 3-4%, easily beat Taiwan’s own rate of 2%.
Other experts say that returns are far higher than that. Christopher Dillon, author of Landed, the Guide to Buying Property in Japan, told Channel News Asia that returns of 5-10% are achievable in central Tokyo and up to 15% on the outskirts. He says Japanese properties are undervalued by as much as 30% compared to Hong Kong and Singapore. He suggested that micro apartments of 100 square foot (<10m2) could be a good investment. They are priced at around five million yen (US$49,000), which is below the average per square foot price (psf) quoted by Knight Frank, of US$640 psf in Tokyo.