Japan, in short, “Mature”, “Steady”, “Low Growth”, “Oversupply”market
- “20 years of bear market” has made Japan property price substantially cheaper.
- Gross rental return is high, at least 5% even in Tokyo prime area. Over 10% is easily found in many places.
- Capital growth opportunity is limited, due to shrinking/ageing population
- Vacancy rate is high (national average 20%) due to oversupply. Some areas experiences rent decrease.
- Currently, Tokyo enjoys Olympic impact, expects gradual capital growth towards 2020.
Pros and Cons of Japan market
- High rental return
- High yield gap (Low interest rate)
- High building quality, earthquake-proof technology
- High maintenance ability
- Shortcomings, Risks
- Low capital growth
- Complex tax system
- Market is still very domestic. Limited service for non-Japanese
Different area, different investment model…
Tokyo metro areas (Yokohama, Saitama etc..)
Second – tier cities (Osaka, Nagoya, Fukuoka etc…)
Rural Small/medium cities