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Why 2021 is still a good time to buy Japanese real estate?


Why 2020 is still a good time to buy Japanese real estate?

For many savvy investors, the purpose of buying overseas is often two-fold: the potential financial gains are essential but so are lifestyle factors. Here's where Japan and its property comes into its own.

With its social stability, high quality of life, and great diversity of climate, culture, and cuisine, Japan's got a lot going for it.

That's part of the reason why it's one of the world's quickest growing tourist attractions, with 31.9 million arrivals in 2019, hitting a new record for the seventh consecutive year.

Economic factors for investing in Japan make it even more attractive for homebuyers. Japan's financial foundation remains relatively resilient to the pandemic. The 3.4% annual rate of decline in the first quarter compares favourably to the 4.8% the US suffered and the 6.8% China contracted in the first three months of this year.

Therefore, we sum up to seven key reasons why you may want to consider investing in a property in Japan sooner rather than later.

1. Containing coronavirus without lockdown

Despite its proximity to China, a large aged population, and a high urban density, Japan has mitigated the initial catastrophic impacts of Covid-19 successfully.

Five months after reporting the first case, Japan has fewer than 20,000 confirmed cases and less than 1,000 deaths. Life rapidly returned to normal as soon as the state of emergency was lifted.

Coronavirus-Related Deaths in G7 Countries (As of June 22, 2020)

United States 119,975
Britain 42,717
Italy 34,634
France 29,643
Germany 8,895
Canada 8,482
Japan 955

Created by based on data compiled by Johns Hopkins University.

Like some of its peers in the West, the Japanese government has tackled with a massive relief package worth nearly $1 trillion (equivalent to 20% of Japan's GDP) to help the country through this unprecedented challenging time.


2. A world focus on Tokyo through 2021

Olympic Games Tokyo 2020

In light of the Covid-19 pandemic, the Olympic Games Tokyo 2020 has been rescheduled to the summer of 2021. A total of 339 events, the most in modern Olympic history, will happen in Tokyo with most of the schedule and venues remain unchanged.

Analysts believed the postponement would have a limited impact on Japan's economy in the short-term.

Tokyo is home to more Fortune 500 companies than any other city in the world, except Beijing. Hence, this is having a significant effect on infrastructure, as well as demand for property and construction projects.

According to data released by Real Estate Economic Institute (REEI) in January 2019, sales prices for newbuilt condos in the Tokyo 23 Wards had increased every year since 2014. The average sales price-per-sqm in 2018 achieved an increase of 27.6%.

Apart from the above investment opportunities, Tokyo is considered a vibrant, pleasant, safe, and unique place to live.


3. A stable and robust economy

Japan ranked third in the world for GDP

Ranked third in the world for GDP and registering 71 months streak of growth last year, investing in Japan represents a foothold in a strong and stable economy.

Putting the size of the economy into perspective, the Kanto region, of which Greater Tokyo is a part, has a GDP larger than that of Brazil or Italy; and the Hokkaido/Tohoku region in the north has a GDP approaching that of Turkey's.

Japan 's property market is also stable and sophisticated. In the past six years, it has undoubtedly benefited from the Prime Minister "Abenomics" economic policy, with residential property prices around the country on the rise.


4. Affordability and finance-ability of properties

Compared with property prices in other major cities around the world, including New York, London, Hong Kong and Shanghai, Tokyo still offers good affordability.

For instance, a mid-market apartment in the centre of Tokyo would cost around $15,000 per sqm; while in Hong Kong, a similar property would be double as expensive.

Tokyo apartments are also bigger than you might have thought: the average exclusive-use area of a new apartment in the greater Tokyo area is 66 sqm (about 710 sqft).

Apartment in Tokyo, Japan for sale

73-sqm 3-bedroom apartment near Kachidoki Station in Tokyo for sale at JPY 89,800,000. Click for details

Besides, the availability of mortgages from banks like UOB, BOC and OCBC, has made financing of home buying in Japan more viable than ever.


5. Excellent rental opportunities

In Tokyo's central districts gross rental yields range from 3.4% to 5.4%. They're a little higher on smaller apartments, which on the other hand tend to need more maintenance.

The average monthly rent of an apartment in Tokyo's 23 wards has risen 5.8% from April 2019 to March 2020, rounding up to an approximate 30% jump from the bottom in late 2012.

These are encouraging figures. Together with the ease to find long-term, professional tenants in the central wards of Tokyo, why don't we check out some apartments ideal for rental investment?


6. Foreigner-friendly property ownership laws

ALL foreign nationals can own property in Japan without any restrictions.

No citizenship or residency is necessary. No limitations on ownership rights to land exist, unlike in some Asian countries, such as Thailand and the Philippines.

More than that, there is no expiration date on proprietary rights. Property can be bought, sold, and inherited freely among foreigners.

Unlike some countries like Canada and Australia, there are no extra fee or taxes applied to foreign buyers. The tax paid by a foreigner upon purchase is the same as a Japanese citizen.

However, it should be noted that no residence visa is provided to foreigners for owning property in Japan.


7. It's a great place for a getaway and even retirement!

Japan has long been a popular tourist destination and is gaining in popularity as a retirement spot for expatriates from around the world.

Park Hyatt Niseko, Hanazono

Park Hyatt Niseko, Hanazono

If you're looking at buying a property in Japan to enjoy a variety of cultural and natural beauty as a tourist, Japan offers terrific vacation possibilities. Owning a holiday home gives you a reason to return again and again - and you still won't run out of things to do!

On top of all the factors already described, there are excellent healthcare facilities available all over the country. Japan ranks first among OECD countries for the number of hospital beds per 1000 people. Similarly, it boasts the longest life expectancy on the planet with close to 85 years.

It's widely considered a very peaceful place to live too. It was ranked second in Asia in the Global Peace Index 2020.

Additionally, Japan performs well in the OECD Better Life Index, especially for personal security, income and wealth, housing, education, and environmental quality.

Are there challenges to investing in Japan? Yes. The language, culture, property purchasing laws and financing regulations might become peculiar to "Gaijin" (foreigner) and will create difficulties if you attempt to navigate them alone. Good news: is here to help! You will be given trusted professional advice on investing in Japan, just by filling in the enquiry form below!

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