Japan's housing market gains momentum with global investors
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Loading... - Sofia Chew
- 01 Mar 2022
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Japan’s nationwide residential property price index rose by 6.9% (6.7% inflation-adjusted) during the year to Q3 2021 – high for Japan. This follows y-o-y rises of 3% in 2020, 0.5% in 2019, 2.1% in 2018, and 2.4% in 2017, according to the Land Institute of Japan.
Quarter-on-quarter, house prices increased 1.6% (0.9% inflation-adjusted).
But there are wide price variations in terms of location and property type.
In Tokyo Metropolitan Area:
· Existing condominium average prices rose strongly by 7.1% during the year to November 2021 to JPY 609,200 (US$ 5,334) per square meter (sq. m), following a y-o-y rise of 4.8% in 2020.
· New condominium average prices fell by 3.54% y-o-y to JPY 871,000 (US$ 7,626) per sq. m in November 2021, following a slight decline of 0.2% during 2020.
· Existing detached house prices rose by a huge 10.1% y-o-y to JPY 38.39 million (US$ 336,121).
In Osaka Metropolitan Area:
· Existing condominium average prices rose strongly by 12% to JPY 377,500 (US$ 3,305) per sq. m during the year to November 2021, from a 3.2% rise during 2020.
· New condominium average prices soared by 30.6% y-o-y to JPY 909,000 (US$ 7,959) per sq. m in November 2021, in sharp contrast to a 6.1% fall in 2020.
· Existing detached house prices rose by 9.5% y-o-y to JPY 22.33 million (US$ 195,508) in November 2021, in contrast to a decline of 2.1% during 2020.
Residential construction is recovering. In the first eleven months of 2021, authorized housing starts rose by 5.1% y-o-y to 788,091 units, following four consecutive years of y-o-y declines, according to the MLIT.
Demand is expected to continue increasing this year, as the country remains an attractive investment destination for ultra-rich Asians.
“Japan is a safe haven for wealthy individuals in Asia,” said Mori Nishimura of Housing Japan. “Nowhere else in Asia can you buy freehold land as a foreigner.” Most foreign buyers in the country come from Singapore, Malaysia, Thailand, Hong Kong, and Mainland China. There is also a growing interest from the US, Australia, Western Europe, Taiwan and Indonesia.
This is supported by a 2021 report released by Savills: “Whilst the global pandemic and the subsequent recession have thrown the real estate market into turmoil, the Japanese residential market on the other hand, known for its defensive nature, has been gaining strong interest from global investors, especially in Tokyo.” Read More…
