Is it Safe to Make a Long-term Investment in Japan Property?

September 20, 2016 Japan

Overseas property investment is usually daunting for many investors due to the uncertainty and volatility of many international markets. It is even more so in the Japan property market with its shrinking population that kept demand for residential housing low, its nature of being prone to natural disasters, and its sluggish economy. But rest assured, Japan is still a safe bet for anyone looking to invest in real estate.

Japan Property | Buying Property in Japan | Real Estate

Going Strong despite Sluggish Economy

In an environment where there is sluggish economic growth and negative interest rates, it has been reported that the Japan property market is still going strong as investment-grade properties continue to generate above-average returns. This is usually because the property market will always be attractive for many as there is a secure flow of income and can balance out portfolios.

In the case of Japan, it has earned additional advantage the moment it decided to attract more overseas property investment. Offshore investors interested in buying property in Japan will find it extremely easy to proceed in doing so because there are no restrictions at all unlike most foreign countries. Anyone can invest in Japan property regardless of visa or status.

Upcoming Events to Boost the Property Market

Two upcoming events are also expected to push more interest from investors in the Japan property market. One of them is the Trans-Pacific Partnership (TPP) that will establish a free trade zone among 12 Pacific Rim countries. This partnership is expected to add $23.2 billion to Japan’s GDP, and will be signed by U.S. President Obama right before his term ends. Not only will this benefit the country’s economic situation as a whole, but this will also heavily influence Japan’s real estate industry. Experts say that this partnership will bring about a realignment of logistic networks and creation of new trade flow patterns. This would mean a displacement of entire population centres, and thus, will hold plenty of opportunities for the Japan property market, especially as more expats and visitors come in.

The second event that is expected to heavily influence the industry is the 2020 Olympics. Recently, the local construction sector has been building state-of-the-art sport facilities valued at $3.8 billion and hotels to accommodate some 20 million visitors. Furthermore, real estate prices will continue to go up as more infrastructure such as new bus lanes will be constructed for this very event. Whether the rates will maintain after the Olympics is still in doubt but it will surely push Japan property prices up for the meantime.

Japan Ups its Game against Natural Disasters

The country’s nature of being prone to disasters is definitely a major concern for any investor buying property in Japan. Japan is a country that has around 5,000 earth tremors each year. Although most are not that lethal, the country has been home to many serious catastrophes such as the March 2011 quake that took the lives of over 20,000 people.

In light of this, the Japanese government has introduced a rigorous seismic building code, especially for commercial properties, and adopted construction technology that has been retro-fitted and certified as earthquake resistant. Although no one is completely safe from a natural catastrophe, the introduction of state-of-the-art construction technology and emergency measures can give peace of mind to anyone, including foreign investors interested in investing in Japan property.

Despite many negative reports by the media on Japan, it is still definitely a safe bet for anyone buying property in Japan for a long-term source of income. Want to get more updates on the Japan property market? Follow us on our Facebook page. Alternatively, you can send us any business enquiry in our Contact Us page.

 

Source:
The World Folio
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