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Overseas Real Estate Investment: Tokyo in Focus

PUBLISHED : Wednesday, 14 October, 2015, 10:41am
UPDATED : Wednesday, 14 October, 2015, 10:41am

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On paper, Japan doesn’t seem like the obvious choice for investment – an ageing population, stagnant wages and the general economic slowdown – but recently we’ve noticed that the tables are turning.  Local and international property investors have started to snap up real estate purchases with more vigour – with inbound investment accounting for 21% of overall investment in the first half of 2015.

So what do they know that we don’t?

Property prices are rising. Despite demand for local property remaining weak, house prices have continued to grow.  The overall residential property price index rose 3.6% year-on-year in July 2015, while the Tokyo index was up by over 6.3% in the same period.  JLL data suggests that this upward price trend will continue, and is yet to reach an all-time high.

Good value for money.  The Yen’s 15% drop against the dollar since January 2014, has made buying properties in Japan more attractive for foreign investors.  At JLL we have seen excellent returns on investment within the Tokyo residential market, with one case seeing a value jump of 21% within a year.   

Rising numbers of foreign visitors.  Japan has increasingly started to host more foreigners both as tourists and economic migrants.  The increase in foreign workers has been attributed to the relaxation in employment laws by the government for external parties.  At a commercial, level recent big investments have been made by prominent Chinese, Taiwanese and Singaporean companies. 

So where are they investing?

The well-known trendy tourist district of Shibuya might seem like an obvious choice, but it currently remains one of Tokyo’s most profitable investment areas.  As Tokyo’s population grows so does the property demand in the city.  Shibuya is home to one of the largest shopping districts in Tokyo, with over 70% of the population of working age living in one bedroom and studio apartments.  The redevelopment of the Shibuya Station area will further contribute further to the districts allure.  

 

For more information about international investment opportunities please contact Mandy Wong at +852 2846 5782 or mandy.wong@ap.jll.com .  Alternatively you can visit our website: www.jllresidential.com/hk/