Real Estate in Japan
Investing in real estate in Japan doesn't make sense to me
Property can be a good investment because it allows you to use leverage (use other people's money) and because it is often treated favourably by the tax code.
Unfortunately property in Japan is somewhat unique and I don't think it makes sense to invest in it at the moment. I have tried to make it work, but no matter how I do the sums they just don't add up.
Now, if you want to buy a place for you or your family to live in, that makes perfect sense to me. Just be aware of why you are doing it, do the maths and figure out how much it is going to cost you over the period of time you live in the house, and make sure you are happy with that before committing to anything.
The benefits of buying property in Japan
-low interest rates
-older properties are heavily discounted if you are buying second-hand
-favorable tax treatment of mortgages
The drawbacks of buying property in Japan
-buildings depreciate to ￥0 over 20-30 years
-the demographics indicate a future collapse of land prices
-current zoning laws artificially inflate land prices but could be changed in the future
-high property taxes
-low rents
-renters enjoy considerable protection under the law
-natural disasters can damage or destroy buildings, insurance can be difficult to claim in that situation
-Japan's social and political future is uncertain
Looking at the above, I think the financial case against buying is strong. I may be biased having experienced the earthquake in Sendai a couple of years ago, but I am much more inclined to rent and invest any extra money.
A couple of years ago I started investigating the possibility of buying property to let in Sendai. I found that the yields on apartments and 'mansions' were so low that again, it made little sense to me to buy -I could get a better return with much higher liquidity and less risk elsewhere.
Unfortunately, it seems to me that property as an investment in Japan is a non-starter.
What do you think? Let me know in the comments.
Do steem and cryptos!!!! Then buy all the lands you can with all those money!
I'm new to Steem and don't have any other cryptocurrencies. Not 100% sold on them to be honest ;)
Keep posting and curating on Steemit, and you can earn some Steem. And if Steem appreciates on the same trajectory as bitcoin and ethereum, you might have a bit of extra $ or Y in a few years.
I agree with your comments about buying property in Japan. With the rapidly aging population, there will be more and more great deals on property, especially in the smaller towns, villages and countryside.
The youth have already left those places, and the elderly are slowly dying off, so there's not much demand for houses in those places. But you're correct in saying that it would be wise to buy only if you plan to live in it. The market for those homes will keep dropping, to infinity. And the buyer would have to consider if he really wanted to live there.
Anyway, I saw that you live in Sendai, my former home. (Miyagino-ku, Hara-no-machi, on Route 45 out to Shiogama) I haven't been there for years, but assume it's still a great city to live in.
Wow, small world! Yeah, I live on Route 45 a bit further out (Nakano Sakae).
Sendai is even better to live in now. It grew to 1.3m after the earthquake as people moved into the city and is enjoying a bit of a boom at the moment :)
Well, you better study em, crypto currencies' era has just started! Ride its wave and be glorious in winning those money!!!!
Congratulations @retirejapan! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
Click on any badge to view your own Board of Honor on SteemitBoard.
For more information about SteemitBoard, click here
If you no longer want to receive notifications, reply to this comment with the word
STOP