Friday, December 09, 2022

Weak yen makes Japan’s real estate market interesting to foreign investors

The weak yen has made Japan’s real estate market attractive to foreign investors. Many buy cheap real estate and then sell it at inflated prices.

Many real estate companies are now receiving increasing inquiries from the United States, China, but also Southeast Asia and the Middle East. Most investors are looking to invest in Japanese real estate for the first time.

Real estate companies are getting more and more inquiries from investors

In Shenjumiaosuan, a website that provides Chinese-language information about Japanese real estate, inquiries between April and June rose 20 percent compared to the previous quarter.

The increase in inquiries coincides with the weakening of the yen. The Japanese currency fell by nearly 130 points against the dollar in April and weakened again in June.

Japanese property prices on the site have risen 10 to 30 percent in yen terms over the past seven years, but have fallen in yuan terms due to the recent devaluation of the Japanese currency.

The site’s main users are Chinese people in their 30s and 40s, most of whom are buying one-bedroom apartments for cash, which the site operator says cost between 10 and 20 million yen.

Another foreign investor website Real Estate Japan also received around 200 inquiries in a month from January to February. In the meantime, however, the number of inquiries has more than doubled.

Japanese property prices may continue to rise

Properties in Tokyo, Osaka and other major cities are particularly popular, but leisure areas such as Hokkaido and Okinawa are still interesting.

As the Bank of Japan maintains its low interest rate policy while many foreign central banks are raising interest rates, the yen could depreciate further. This, in turn, could further drive up Japanese property prices and make property purchases significantly more expensive for Japanese people.

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