Foreign Investors Investing in Japanese Real Estate

Foreign Investor・Real Estate in Japan・Judgement・Business practice

Recently, I have been receiving more inquiries from foreign investors, probably due in part to the weakening yen and the Covid-19 is coming to an end. Now most inquiries from Hong Kong, Singapore, Korea, Taiwan, and Australia, as well as Indonesia, Thailand, Malaysia, and India. In the future, I hope to receive demand from Europe (England, Germany, Netherlands, etc.), USA and Canada.

The advantages of investing in Japanese real estate for foreign investors are the following;
1,Low Country Risk・・・Japan is considered to be one of the world’s safest and least volatile real estate investment markets. Japan has one of the strongest global economies and one of the most reliable financial systems. It also has a solid real estate market, with a stable and established legal frameworks, making it an attractive option for those with a low risk tolerance.
2,Low barrier to entry from overseas・・・Some countries have restrictions on the purchase of real estate by foreigners. In Singapore, the purchase or ownership of land by foreigners is prohibited in principle. Australia also stipulates that only newly built properties or land may be purchased. In some countries, you can only purchase a local company if you have a partnership with a local company and the local company’s shareholding ratio is 50% or more. In Japan, however, there is no regulation or even additional taxation of foreign buyers. Since the necessary expenses are the same as those of Japanese, the real estate investment market is very easy for foreigners to enter.
3,Affordable price・・・It has potential long-term capital appreciation. Since the late 1980s and 1990s,Japanese real estate prices have been appreciating. In Japan, yields of 3% or less can be found in Ginza, Tokyo, but yields are generally 3.5% to 5.5% in Tokyo, 3.8% to 8% in Osaka, and the price per tsubo of condominiums is finally comparable to those in New York, London and Hong Kong. Furthermore, interest rates for borrowing from financial institutions range from 1 to 4%, about half the rates in other countries. The difference between the yield on real estate and the interest rate on loans from financial institutions, or the so-called yield gap, is what makes investing in Japan attractive.

Unfortunately, however, I was brought to my office for consultation on events that should make me ashamed to be Japanese.
Consultations regarding deceptive and fraudulent sales practices that take advantage of foreign investors’ ignorance of Japanese real estate customs. Suddenly becoming unreachable, not providing follow-up services. They sign contracts only in Japanese and did not provided explanations in English.
If you are an overseas investor who is currently having trouble with these issues, I am sure I can help you, although in some cases you may incur temporary losses in order to get the pus out of the current situation. Please feel free to consult with me.