If you are thinking to invest to real estate market, you may think which county the best choice for you.
If the Japanese real estate market can be one of your choices, I would like to explain you the advantages and disadvantages of investing to Japanese real estate market from my personal point of view.
There are 2 main advantages to invest to Japanese real estate market.
Advantage 1. There is no governmental restriction or extra taxes because of non-Japanese.
Japanese government do not set any restriction to foreigners owning real estate in Japan.
Some countries set extra tax or limit some real estate deal for foreigners, there is no extra tax or costs for foreigners, everyone can buy Japanese real estate at the same condition as local Japanese.
For example, some countries that have restrictions on foreign ownership of property include Australia, Britain, Hong Kong, Singapore and Switzerland.
In Australia, foreigners can buy property in Australia but typically you need to be a permanent resident or citizen. The property needs to be categorized as an investment and you need to get government approval. For non-residents or temporary visa holders, it’s legally necessary to buy non-residential property in Australia after getting permission from the Foreign Investment Review Board (FIRB). You will also need to provide copies of your personal identification documents (passport), proof you qualify to buy a property under FIRB rules, proof of legal residence in Australia, and documents to prove you’re creditworthy (usually a credit check, bank statements, proof of your wages, tax returns for the last three years or a letter from your employer).
In Singapore, foreigners can buy property in Singapore but there are certain restrictions. For example, foreigners are not allowed to buy landed properties without approval from the Singapore Land Authority. Additionally, foreigners are subject to additional buyer’s stamp duty (ABSD) when purchasing residential property in Singapore.
In Hong kong, foreigners can buy property in Hong Kong but there are certain restrictions. For example, foreigners are subject to additional stamp duty when purchasing residential property in Hong Kong.
As for other countries such as like Croatia, Turkey and South Korea, land ownership is open only to certain nationalities because of reciprocity agreements.
Advantage 2.Weak Japanese Yen
According to the historical chart of the daily U.S. Dollar – Japanese Yen (USDJPY) exchange rate, as of June 2023, the exchange rate is around 140 JPY per USD. In June 2018, it was around 110 JPY per USD as well. In June 2016, it was around 106 JPY per USD. It means that, to purchase a property which costs 100mil Japanese Yen, you needed to prepare 943,400 USD in June 2016, but you need to prepare only 713,400 USD in June 2023 to purchase the price property in Japanese Yen. It is not exaggerated to say, now is around 25% bargain sale of Japanese real estate compared with that period.
There is also a disadvantage for Japanese real estate market compared with other market from my personal point of view.
I feel that there are language and culture barriers, so it is not easy for non-Japanese to control everything by themselves. The deals are following Japanese real estate law, all original documents are written in Japanese, and there are Japanese business habits.
So I believe the most important point to make the successful deal is, to find a reliable Japanese agent who can work on behalf of you.
We REDS support Japanese local customers mainly, we have experienced agents only who deal daily in Tokyo, and we provide totally same services with totally same fees to foreigners.
Now is the good timing to invest to Japanese market, Japanese government removed immigration restriction from May this year, so now everyone can come to Japan to check properties.
We REDS are pleased to assist you searching a property based on your requirements, arranging a property tour, and negotiating prices with the sellers on behalf of you in Tokyo.
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狩野 広樹
(宅建士・リフォームスタイリスト)
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