Japan offers myriad property investment options

Overseas Property | 14 Mar 2019

Japan has, in recent years, gained favor with Hongkongers as a property investment hotspot, but due to differences in property laws and regulations, potential buyers are sometimes bewildered by the complexity, and in need of guidance to navigate the Japanese property market maze.

Hongkongers have long had a love affair with Japan, says Alex Yeung, Vice President of Hong Kong Chamber of Professional Property Consultants Limited, and in 2018 alone, over 2 million locals have made the pilgrimage there. "The affection stems from a combination of high-quality living, serene environment, security, cleanliness, and a lowly exchange rate," Yeung observes. "This fondness for everything Japanese overflows into the property market where prices are much more affordable compared to Hong Kong."

In analyzing Japanese properties, Yeung believes they are usually more suited for experienced investors, but homeowners in Hong Kong who have some extra cash will also find it a good option. Before making any commitment though, buyers are strongly advised to visit the property on-site and compare different options.

Yeung also reminds potential overseas buyers that for brand-new properties, mortgage loans of 50% or more are available, but older second-hand properties may not qualify and require full payment.

What to buy?

While renting the property to locals offers a stable rental return, investors can also consider hotel and B&B properties. But Yeung advises buyers to pay attention to the land use restriction of the plot; he points out that running a B&B in Japan is almost only possible when the buyer purchases the whole building.

"My recommendation is to focus on small apartment buildings which often start at HK$7 million, bringing down the management cost," he explains. "Single-family homes are also very popular as they could be repurposed, such as B&B, students' dormitory, and other lodgings. They command a higher rental yield, and could be redeveloped."

Where to buy?

In choosing the location, buyers must, first and foremost, define their motive, says Yeung. "If you're looking for a holiday home, Karuizawa boasts stunning scenery, while Kyoto exudes historical charm," he says, quoting examples.

For investment, Yeung believes only Tokyo and Osaka are really worth serious attention, and with a declining population in Japan, choosing the right place is an important consideration. "Your ideal choice would be those located in busy districts and near train stations," says Yeung. "Nishinari-ku and Chuo-ku in Osaka are looking good, as well as Minato-ku, Toshima-ku, Shinjuku-ku and Shibuya-ku in Tokyo."

When Japan concludes the current Heisei era on May 1, Tokyo and Osaka are set to enter a bull market supported by a series of significant upcoming international events, including the G20 summit and the 2020 Olympics in Tokyo, while Osaka is also planning to welcome its first casino in 2024, followed by the World Expo 2025.

Century 21 Culture Center Property Limited

Yeung emphasizes that in purchasing overseas properties, always look for a professional and responsible agent. "Under the renowned Century 21 Group, our resourceful team has offices in Tokyo, Osaka, Hong Kong, and Macau to support clients' myriad needs," he points out. "Meanwhile, our Hong Kong and Chinese staff are able to communicate effectively with local buyers without language barriers."

Over the years, the team has won clients' trust with their customer-oriented approach, market knowledge and attention to details. They help clients steer clear of risks and hazards, and enable them to make informed and wise investment decisions.

Century 21 Culture Center Property Limited

Phone: 5266 3082

Website: www.c21-tokyo.com

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