Eye on Japanese real estate

A recent news report revealed that Japan’s property market is luring more Asian investors seeking high rental yields as well as capital gains, which are not available back home...

More investors from Asia, including Singapore, are looking for good property deals in Japan.

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For those looking for good investment opportunities in Japan, HJ Real Estate offers plenty of useful information and advice to help prospective buyers make well-informed investment decisions.

A recent news report by The Japan Times revealed that Japan’s property market is luring more Asian investors seeking high rental yields as well as capital gains, which are not available back home.

“Money is flowing in mostly from Taiwan, Hong Kong, mainland China and Singapore,” the report said.

According to the latest data from Global Property Guide, gross rental yield in Japan, or what a landlord can expect as a return on investment before taxes, maintenance fees and other costs, is 3.43 percent compared to one to two percent in Hong Kong, Singapore and Taiwan. Rental yields in Beijing and Shanghai are also lower.

Singaporean investor Leon C Q is one of the many investors from Singapore who has parked his money in real estate in Japan, as he finds that there is more room for price increases and higher yields, as compared to Singapore.

He recently bought two properties: a luxurious condominium apartment and a newly built single-family house – both in Tokyo’s Minato area.

“My family and I like the Minato area a lot, primarily for its central location, excellent amenities and popularity with foreigners,” Leon explained.

Sharing his thoughts on the factors that lured him to invest in Japanese real estate, he said: “Since the government introduced a slew of cooling measures a couple years back, I was looking elsewhere for better investment opportunities. Japan stood out as their Prime Minister Shinzo Abe’s introduction of his Abenomics policies in late 2012 pushed the yen lower, making Japan’s real estate cheaper for us foreign buyers. I also considered that the yen is a safe haven for currency, especially in today’s uncertain economic environment.

“The upcoming Olympic Games, and the legalising of casinos and integrated resorts, are also expected to boost the country’s economy. Most importantly, when compared to other metropolitans in developed nations, the property prices in Japan are very attractive, and the rental yields are relatively high.

“Additional factors that make property investment in Japan appealing to me include exceptional build quality and transparency in transactions.”

Buying tips: Engage the help of a licensed estate agency

While investing in properties in Japan may seem attractive, securing a good investment is no walk in the park, as buyers, especially foreigners, are bound to face challenges along the way. Therefore, it is crucial to engage the help of an experienced real estate consultant to prevent any misunderstanding and bad investment decisions.

“Having an excellent real estate consultant to advise you on the potential and types of opportunities are obviously very crucial for making a sound investment decision in Japan, especially for foreign non-resident investors like us. At the end of the day, you may not necessarily end up with something to invest in, but so be it, as long as you get the best professional advice,” Leon noted.

Sharing some of the challenges he faced when purchasing properties in Japan, Leon said: “As non-resident foreign investors, it was quite difficult to secure loans from banks to fund my investments. But thankfully I engaged the help of HJ Real Estate, who was exceptionally resourceful in this respect, connecting with various banks, and we eventually found an ideal solution that fit our needs.

“Another area that HJ assisted us greatly with was liaising with various parties in negotiating the prices, which resulted in a win-win situation for both buyer and seller. I have to say that without great understanding of local business culture and good practices, it would be quite difficult for foreign investors like us to achieve the best and optimal outcome in any negotiation in Japan.“

Perks of enlisting the help of a licensed estate agency

Aside from assisting with language barriers, Leon shared that there are many other benefits of enlisting the help of a licensed and highly experienced estate agency.

“HJ Real Estate provided excellent support in terms of advice on the best investment opportunities available based on my target investment quantum, investment objectives, duration of holding and risk appetite. They also understand the market very well, and are able to advise us regarding tax implications for various types of investment.

“Another reason why we engaged HJ Real Estate was because they have great connection with quality developers and excellent knowledge on land availability for development-type projects.

“Lastly, unlike other real estate agents who only help foreign investors with the sourcing of property and paperwork, HJ Real Estate has subsidiaries that can take care of leasing out the property, as well as an Asset and Project Management team that can support those who plan to develop their own properties.”

Tips for prospective investors

Following his successful property investments in Japan, Leon has some advice for prospective investors hoping to enter Japan’s real estate market.

“The other area to be constantly on the lookout for are geo-political and macro developments in Japan and the region, as these will affect business climate and foreign exchange (forex). In addition, the time perspective of when you invest and divest must always be taken into consideration before you make an investment,” he said.

About HJ Real Estate

For prospective buyers searching for good investment opportunities in Japan, they can enlist the help of HJ Real Estate who can provide plenty of useful information and advice to help investors make well informed investment decisions.

An associate company of Housing Japan K.K., a major international real estate agency in Tokyo that was established in 2000, as well as HJ Asset Management K.K. – an independent asset management firm, HJ Real Estate, which has an established history in providing a broad range of real estate services to clients both in Japan and around the world, is the gateway to Japanese real estate.

Investors looking for either a holiday home or a property solely for investment purposes in Japan, HJ Real Estate has an extensive portfolio of projects, from brand-new and secondary market condominiums and vacation homes, to landed and commercial or office buildings, for you to pick from.

In addition, as an officially licensed Singapore estate agency, HJ Real Estate not only has direct access to Japanese local financing and tax options, but they also ensure complete legal compliance with local authorities. Lastly, the company’s strength in various languages allows them to effectively service their clients of diverse backgrounds.

For more information, visit hjrealestate.com.sg and email Tsutomu Sato and Peter Koh at Marketing@hjrealestate.com.sg

Disclaimer: All forms of investment carry risks, including the risk of losing all the invested amount. Such activities may not be suitable for everyone. This is an overseas investment. As overseas investments carry additional financial, regulatory and legal risks, investors are advised to do the necessary checks and research on the investment beforehand.