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Reasons to Invest in Japan Real Estate

What makes direct Japan real estate investment looks appealing to investors from overseas?

Japan real estate looks appealing to some investors because of its under-priced assets and monthly firm rental income. Some of you might already considering to invest direct real estate for its good return. The weak yen can be another reason for overseas investors to invest Japan.

house prices around the world

Sources: IMF Global Housing Watch

5 years exchange rate usd to jpy
Sources: IMF Global Housing Watch

house price-to-income ratio
Sources: IMF Global Housing Watch

house price-to-rent ratio
Sources: IMF Global Housing Watch

Is Japan real estate profitable?

In real estate investment field, there is nothing important than finding a good tenant. Japan has good tenant potential even decrement of population and smaller growth of GDP.

Base 1: Particular place has increment of population

Japan population is decreasing every year and it continues sliding down. But it’s too early to exclude Japan from your candidates. There are lands where keep their increments of population. Where? Tokyo Special Wards (formed by 23 wards). It means the potential of tenant’s needs will be continuingly high and that’s where you search the building. A research from annual report of Nomura Research Institute, Ltd. says not all over the Tokyo Special Ward, but only three wards located along the Tokyo bay side named “Chuo-ku”, “Koto-ku”, and “Minato-ku” have forecasts of population increment for several decades.
forecast of population by each wards
Source; Nomura Research Institute, Ltd “The Asian Real Estate Market 2015”

Map of Tokyo Special Wards (Tokyo 23 Wards)

image012

①Chuo-ku, ②Koto-ku, ③Minato-ku, ④Shinjuku- ku, ⑤Shinagawa-ku, ⑥Bunkyo-ku, ⑦Shibuya-ku

Base 2: Japan GDP ranking still looks good

Forecast showing Japan GDP ratio remains around 1% in 2020, but that is still No. 3 in world ranking.
nominal GDP of Major Countries
Source: Nomura Research Institute, Ltd “The Asian Real Estate Market 2015” and IMF database 2015.

Base 3: Tokyo continues world’s largest urban area

Tokyo is the world’s largest urban area in terms of population and GDP, says “The Asian Real Estate Market 2015” by Nomura Research Institute Ltd. Just take a look at the graph below and see how it looks appealing.

Top 30 cities of GDP/population estimation in 2025
Source: Based on Nomura Research Institute, Ltd “The Asian Real Estate Market 2015”, data from Demographia (January 2015) and Pricewaterhouse Coopers “Global city GDP rankings 2008-2025”.

We hope this article will become a help for you to know about Japan houses and economies before investing to real estate.

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