Let’s face it.
Kenbiya (One of Japan’s major internet web sites on the real estate property for the investment) recently announced the latest market update
for the first quarter of 2019. I am quickly sharing the summary of the report today.
Price: The average asking price
Yield :Gross yield. It is calculated as a percentage based on the property’s market value divided by the income generated by the property
(before finance cost/management cost/tax)
Condominiums (one unit)
Yield 7.36% (-0.45 points compared to the previous quarter)
Ave Price 15.51 million yen (+ 10.79 point )
Happy new year 2019 ! Year of Boar.
New year has just begun and I would like to quickly review the market using some statistics.
The data always tells you the fact. How to read the data is a key for success.
It is too early to know if housing is in another bubble in Japan (I don’t think so)
It will depend on what happens with the global economy. Unfortunately, bubbles are only recognized with 100 percent certainty
in 20/20 hindsight.
The national average standard price of land
According to the government announcement, the national average standard price of land (基準地価) published in September 2018
by the Ministry of Land, Infrastructure and Transport, land lots for all uses excluding forest lands nationwide
went up by 0.1% compared with the previous year, rising for the first time in 27
years since 1991. The average rate of residential areas was down 0.3% nationwide, falling for 27
consecutive years, but the rate of declines shrank 0.3% from the previous yearRead more
Interested in buying a property in Japan where the country risk is lowest in the world ?
Japan is a rare Asian country insofar as it allows foreigners to buy a property. Foreigners can buy both land and building without special qualification. When it comes to buying a property here, Japan has very few restrictions than the Western countries.
Ownership rights to land and building in Japan by a foreigner is also permitted just like Japanese citizens.
When a registrar has made a registration of ownership with respect to a real property with Legal Affairs Bureau, he/she shall can officially claim the title deeds of the property. However, there are restrictions on agricultural land (farmland). You need to get prior permission from a local agriculture committee (nogyo-iinkai) or governor when you buy the farmland. At least one corporate manager (one member of new owner) has to engage in full-time farming. In other words, if you want to buy farmland, you must become a farmer. The
JLL-Japan (JLL is an American professional services and investment management company specializing in real estate) recently held the conference in Tokyo with 400 participants from 250 companies.
JLL reported very bullish news about Tokyo market as follows:
“Tokyo overtook London as the world’s busiest real estate market in the first quarter of 2018, with mega-deals and an unusually positive economic outlook driving demand.
Investment volumes in the Japanese capital more than doubled to US$9.1 billion in the three months to March (2017: US$4.3 billion), just beating New York (US$9 billion) and way ahead of third-placed London (US$5.9 billion).
Global deal volumes rose 15 percent to US$165 billion, making the start of 2018 the biggest quarter for commercial real estate deals since 2007. Asia Pacific transactions rose 34 percent to US$40 billion.”
Tokyo will continue to see the many office construction sites till 2020 and it would make the rental growth slow but the rents have been steady and are still rising.
According to a report by the prominent Japanese real estate consulting firm ‘Sanki shoji’, the vacancy rate of offices in upscale locations in Tokyo as of September 2018 stands at only 2.33 percent (down 0.12 percent from the previous month) and the rents have been steadily rising in last twelve months.
（Kashiwa station, Chiba)
Do you want to know the best buy places to own a condo unit in Japan ?
Toyokeizai, one of the renowned business magazines in Japan
recently featured the unique real estate (condo unit for home) information in Japan.
The magazine picked up some best buy railways stations in greater Tokyo, Osaka and Nagoya to own for your home.
The ranking is based on unique method of PER (Price Earning Ratio).
This particular PER is used to calculate the length (years) to pay back the property price
(new 3 bed room unit with 70 m2) if you rent out.
For example, Read more
In Japan’s condominium industry, there are some serious issues.
In 2015, there was a huge scandal involving the condo complex called
“Park city La La Yokohama” developed by Mitsui Fudosan.
Mitsui Fudosan is the top developer in Japan.
Construction based on false data was carried out in October 2015, and a scandal where the building was inclined was discovered because the plurality of piles did not reach the appropriate depth in the ground. Safety for earthquake resistance was suspected.Read more
There are many apartment buildings which are failing in the their management in Japan.If you live in the apartment buildings you have to be cautiously attentive how your building is managed.
What about the property for the investment ?
KENBIYA (major Japanese property web site) recently wrote an interesting story about the management of the residential buildings (both for living and investment)
As an investor, perhaps the management of the building does not seem to be your business but I have to warn you that actually the management of many residential buildings for the investment is more likely to
But Why ?
The reason is very simple. Owners (investors) don’t care because they don’t live there.
In some cases monthly management fee (管理費）is not paid by many owners, management fee (fund) is spent improperly. In some cases someone took the money and run away.
Serious trouble of the property for investment that were built the bubble period.
One of the relatively common examples is the an apartment in Tokyo, which is close to the city center.
These buildings (usually with units of studios) were built as a tax saving measure for salaried workers in the bubble period.
Recruit Sumai Co., operator of the Suumo residential information website, recently released the ranking of locations
(and train stations) where people in the Kanto region want to reside in 2018.
(Kanto region in this report covers Tokyo, Kanagawa, Chiba, Saitama and Ibaraki)
They released the same report for Kansai region (including Osaka, Kyoto and Kobe as well.
The survey began in 2010 and has been conducted every year.
7000 people in the Kanto area responded and they are in the
age between 20 and 49. People over 50 years old are not surveyed, which naturally distorts the statistics.
Here is the ranking for 2018 and data in 2017 and 2013 are also illustrated for a comparison purpose.
The RECRUIT company (major Japanese real estate advertisement company) released its own survey on people from greater Tokyo area (Tokyo, Kanagawa, Saitama and Chiba) who have purchased the newly built condominiums in 2017.
Over 4700 people responded.
Here is the quick summary of the report.
1. Location of condo purchased
Tokyo’s 23 wards increased its share slightly from 2016 to 43% and
20% of respondents bought condos in “Kanagawa prefecture”. (ranked 2nd next to Tokyo 23 wards)
The average purchase price of condos is 54.52 million yen,
(U$500,000), the highest since the survey started in 2001.
3. Trend in each prefecture
The average price in Tokyo 23 wards exceeded 60 million yen (U$545,000) for the first time since the survey began
The average age is 38.6 years old and the households with children account for 45%.
5. Income and household
Average households total annual income is 9.44 million yen(U$89,000), Married couples account for 65%
Households with annual income of 10 million yen or more gradually increase, to 36%. 65% of households generate dual income (both husbands and wives working), the highest since the survey began in 2001.
57% of single-person households buy the condominiums within Tokyo 23 wards which is significantly higher than other households.