Japan (and its Real-Estate market) Rides Again

Following up on the above, here’s a Sapporo city deal analysis for your review. Still a favourite due to higher yields than the rest of the country can provide, as mentioned above. Similar or higher theoretical yields can be found in smaller townships, but nowhere near the size of this city (slowly but steadily rising towards the 2 mil population mark as of the 2010 consensus – 2015 figures to be released later this year) – and the danger in those locations, as opposed to a metropolitan centre such as Sapporo, is of course the length of vacancies between tenants, which can potentially be longer.

APR Sapporo Deal Analysis

Hi, Ivan. Hope you enjoyed your stay – which cities are you referring to, and what do you mean by “dire”?

Certainly, Japan isn’t a growth oriented environment – the population is shrinking/ageing fast,and the economy is struggling to break out of two and some decades of deflation. There are several ways in which many are believing this trend could be reversed,but the current administration seems far too entrenched in old-skool, nationalistic and traditional ways of thinking to make this happen. Until immigration and female work force participation and general satisfaction are tackled, the population (and economy with it) is not likely to stabilize, let alone grow significantly.

However (and this is a big however) –

1. The last four years have seen property prices finally rising in all big cities (in some, such as Tokyo and Fukuoka more than in others) – and considering the up and coming 2020 Olympics, will most likely continue to do so at least until then. Last month actually marked the first time prices have been rising nation-wide, as more and more medium cities and townships join the fray. While this doesn’t turn the country into a capital growth market, not by a longshot, it means that those who have entered the market in Tokyo and Fukuoka in the last four years have gained significantly (in the lower brackets, which we normally deal in, practically doubled or more in the most central areas), and those who are still entering slower growth markets (such as Sapporo, Nagoya and Kyoto) are likely to enjoy the same effect in the short term at least.

2. Small villages and townships which are slowly dying out due to the ageing/declining population issue, are conglomerating into the bigger metropolitan centres, which are actually growing (again, some more than others), and will most likely continue to do so in the next decade or two at the very least (check out that table at the end of the article linked to above for a list of growing population areas – plenty to be had, and Tokyo isn’t even on top of that list).

3. Perhaps most importantly, Japan isn’t, in our opinion at least, a growth oriented environment. People who invest here diversify their portfolio from speculative, growth oriented locations such as Australia and Singapore, which normally offer very low cashflow, and hedge their portfolio with affordable, high yield properties in Japan, (mostly condos – the last Australian townhouse I liquidated in one of Melbourne’s prime suburbs got me about 12 of these here, all at double the monthly yield or more) which offers some of the developed world’s highest monthly rental returns, coupled with the world’s most docile and hassle-free tenants and business environment.

Here’s a more detailed explanation – Q&A – Japan’s Debt & Demographic Issues

• This reply was modified 8 years, 5 months ago by  Ziv Nakajima-Magen.

Quick heads-up for the busy ones among us, who prefer their content via audio – here’s an introduction to Japan’s real estate property investment market (specifically for non-resident foreigners) – you can find more content in the PodCast’s home page, here.

Enjoy, and a belated happy new year!

Cheers, mate!

Feels a bit like flogging a dead horse, but I’ve got warm sentiments towards this place – this is where it all started for us.

Condo is good, let me know before you show up, will try to mow down some of those trees to give you a better view of the beach ;)

Hi, folks – just a heads-up, if you happen to be around SE-QLD or NNSW on August 6th – going to utilise a well deserved family holiday to talk shop with some local investors interested in Japan’s property market – Seminar -Japan Real-Estate for Foreign Investors

• This reply was modified 6 years, 4 months ago by  Ziv Nakajima-Magen.

Quick heads-up, folks – if there’s anyone out there who’s looking for somewhere to park their hard-earned, we’ve got truckloads of clients who have so far been purchasing in cash (because Japanese banks will not lend to non-resident foreigners, and their countries of residence won’t lend against properties overseas) – they’ll happily pay the 4-5% p/a or so that banks would charge for standard mortgages (maybe slightly more, but I doubt beyond 6%), and you’d have full recourse on the property itself, which would be generating far beyond that, in case they default for any reason (not to mention, we’d probably double or triple our clientele base overnight if they had access to financing, hehehe) – anyone interested, please feel free to hit me up.

Properties start at around 30K USD or so here, sometimes even less, and you will be able to negotiate the length and terms on a case by case basis with the borrowers – all of whom would be serious and verified investors (we can even limit the arrangement to those who have already purchased cash in the past if you so wish).

Just an idea – if anyone’s interested feel free to message me please.