Amidst the increasing perception that the Japanese real estate market is relatively undervalued, the weakening yen adds the attractiveness of the market. (image: lestaylorphoto/flickr)
SEOUL, June 20 (Korea Bizwire) – Asian investors including those from Hong Kong are increasing their possession of Japanese real estates. Even then, many visit to Japan not for tourism purposes but for checking the sites for themselves.
Amidst the increasing perception that the Japanese real estate market is relatively undervalued, the weakening yen adds the attractiveness of the market. Also, the Olympics Games that will be held in Tokyo in 2020 acts as a bonus for the investment.
According to the Japanese business daily Nikkei, since the end of 2012, foreigners’ investment into Japanese real estate properties has begun increasing. The yen’s weakening, one of the main reasons for this kicked into high gear and overseas investment poured into the market.
In fact, the real estate brokerage volume by Mitsui Real Estate in Tokyo marked a record-high level last year, and reached last year’s level already this year.
An official at Mitsui said, “The rise of the real estate market in Japan is caused mainly by the perception of undervaluation of the properties in Tokyo considerably compared with those of Hong Kong, Taiwan and Shanghai.”
The foreign investors had interests in the Japanese real estate assets for the past ten years, but delayed their investment due to the stagnant economy following the 2008 global financial crisis and the 2011 earthquake.
Under that situation, thanks to the cheaper prices by the weakening yen and eased worry on the Japanese economy, the investment frenzy seems to have revived. For example, Goldman Sachs is recommending investment into the Japanese real estate market.
JP Housing, a real estate broker based in Hong Kong, pointed out that it is better to have ten real estate properties in Japan than to have one real estate property in Hong Kong. That much, the real estate price in Tokyo is much cheaper than that of Hong Kong. In fact, comparing with the average real estate price per pyong (3.3 square meters) in Hong Kong of 15 million yen, the average price in Tokyo is only 4 million yen.
Not only investors from Hong Kong, but the rich people from Taiwan are paying keen attention in the market. In the past, most real estate trades were large-scale ones by institutional investors. But now, rich individuals in Hong Kong and Taiwan are buying up the real estate assets, mainly small-scale ones which are undervalued relatively.
A real estate broker in Japan said, “Everyday, two or three customers from Hong Kong and Taiwan are visiting us. They expect the price will keep rising until the Olympic Games which will be held in Tokyo in 2020.”
Meanwhile, the Japanese also show high interest in investing in the real estate market. The broker said, “Residents outside Tokyo are investing in condos in Tokyo. Most of them buy the real estate to prepare their retired lives.”
Written by John Choi (johnchoi@koreabizwire.com)
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