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Big opportunities in Japan

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Japan’s property prices are on the increase despite its declining population and stagnant economy and wages, Deutsche Bank revealed in a June report.

The country’s residential price index rose 1.5 per cent in March compared to a year ago, while Tokyo rose 4.7 per cent.

Tokyo’s condominiums, which cost nine times annual household income rose 8.9 per cent over the same period. "There are many high-net-worth individuals who invested in expensive city center condos (particularly tower condos) as a tax-saving measure," Deutsche Bank said.

"Investment in rental apartments has been also increasing. We view this to be the result of inheritance tax countermeasures." Competition is also stiff and despite an increase in prices by 10 to 20 per cent in two years, Mr Ku Swee Yong, an international property advisor at Century 21 Singapore, thinks the market is good for foreign investment, as the rise in price come after 20 years of recession.

In an interview with CNBC, Mr Ku noted that the yen’s 18 per cent decrease against the US dollar makes Japan’s properties valuable for foreign investment. Also, due to Japan’s low rates, rental cash flow is expected to be positive despite moderating interest rates.

According to Mr Ku, most investors are coming from China, Hong Kong and Taiwan. The relaxed Taiwanese property market, a drop and in rental yields and good exchange rate have caused an influx of Taiwanese investors, while the Chinese are attracted by the weakening yen and the upcoming 2020 Tokyo Olympics.

Taken from iProeprty

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Guest Monday, 13 July 2020