Hello
Originally from Australia, I have been living in Japan for nearly 5 years and intend to be here for at least another 10 years.
I am now trying to determine if buying or renting is a better option financially, because owning does not ensure a capital gain. Most likely zero growth at best. Often, a loss.
If anyone has some experience with property in Japan, I would very much appreciate any inputs regarding this question.
Thank you
DavidHi David
I have been going to Japan for over 20 years now. The property market is very different there. Properties are like new cars, they go down in value. There has not been any capital growth for about 20 years when the bubble burst. I had thought about buying there for the high yields, but you will also encounter problems with finance – it is nothing like in Australia.
My advice is to earn money there and then invest it in Australia.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry
Thank you for your reply.
The only problem with renting is that rent is dead money.
If you compare annual rental costs, say JPY 2,200,000 over 10 years, to a small decline in value of the property, then the rental cost can be higher than property value decline.
Eg., for a JPY 70M property, it would need to lose over 20% in value to equate to the cost of rental money. Does property in general, go down so much?
thanks
DavidHi David,
I have heard that there are extremely good depreciation advantages buying property in say NZ or Australia from Japan and as an expat. If you would like to get the details of this I can pass you onto a person living in Tokyo who knows about this strategy, which he is currently teaching others. He is also an expat.
email me at [email protected]
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of Humour.Ian
What do you mean depreciation? Depreciation should change with the location of the investor. But I agree it would be great to live and work in Japan and buy in Australia with a loan in Yen. you would be looking at interest rates of around 2% pa
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Property in Japan generally goes down in value.
After 20-30 years you would need to rebuild too. the construction there is different and not as sturdy as Australia.
Where abouts are you looking at?
I am going to Osaka in a couple of weeks.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Ian and Terry
Thank you for your feedback.
Is Australia not the same or similar? Ie., after 30 years, you would need to renovate or re-build. The building would be too old to hold much value.
I am looking at Tokyo, inside Yamanote line as I hear the prices hold up the best in this area.
David
Australian houses are much more sturdy. eg. I have a house build in the 1960s and it is rock solid. my family has similar aged houses in Japan and they are falling down.
Many years ago I thought about investing in Japan, but it is just not worth it. No growth. I also recall studying Japanese shares back in 1998 and the Nikkei index was about 15,000 and I thought it may be a time to buy, but today it is around 9,000 almost 14 years later!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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