Investment analysis of Japanese real estate market
Japan is known to the world for many things. One of Asia’s largest economies, a production powerhouse, a country with negligible unemployment, and a business hub. Some of you may not have heard much about the real estate side of Japan. The country observes more real estate transactions each month than what some countries observe in a year. These transactions include large and small. Property prices are high in metropolitan areas and low in rural areas. Seeking an apartment in a metropolitan area may cost you more. It is worth noting that Japanese cities are well planned and properly organized. Following proper planning leads to fewer issues and helps, people find the property of their choice relatively easily. Those looking to invest in this market are necessary to the basics and get the idea of current and upcoming trends in the Japanese real estate market.
An outlook of the current market
If we look at the three years during 2008 - 2011, the acute financial crisis in the world began with the collapse of the Lehman Brothers, followed by global protests. According to the International Monetary Fund, the current epidemic has created a global recession. Prices have been steadily declining - however, basic options are available for purchase during this cycle - most of it is characterized by the unpleasant places on the market.
Therefore, it would be wise - as many of our clients know and are now working on it - to step up and start highlighting and negotiating prices on the most attractive properties available before anyone join the group - and secure a safe investment environment in these difficult times.
Similarly, owners of illegal immigration centers in major Japanese cities, which have taken the "wait to see" approach, been optimistic from the 2020 Tokyo Olympics. They constantly increased the number of visitors to increase prices. Although not all of these offers will be very successful as unscrupulous homeowners with a long-term vision may not sell quickly. There should be enough unless they are too happy to sell their property.
Tourism on the rise
Tourism is among the top reasons for Japan's great recovery over the years - apart from the Prime Minister's "sound" policy statement, called "Abenomics," which produced mixed results. There has been the most significant increase in Japanese tourist numbers since 2011 when it began to recover from the 2008 financial crisis.
At the same time, tourism numbers have risen sharply, and are climbing annually, from 6.2 million visitors in 2011, to more than 31 million in 2018.
As of December 31, 2019, the first signs of the Coronavirus were detected in Wuhan, China - and were rediscovered as a new line of infection on Jan. 7, 2020 - the disease spread like wildfire for the first time throughout Asia and around the world.
For a while, it seemed that Japan would be the center of the epidemic. This practice was exacerbated for a few weeks by an infected boat in Yokohama, near Tokyo, where many infected passengers were received.
Failure of Hospitality, Stores, and Living Places
Not surprisingly, the Japanese hospitality industry, which has focused on the country and the country since the announcement of the postponed events in Tokyo and the Osaka World Expo, and was severely disrupted by these innovations, has suffered greatly from the lack of international tourism.
However, this has led to a new repetition process for some of these assets. Many smart investors buy them at massive discounts, only to make them "flexible" (rental schemes) and shared office spaces, and even data centers.
As mentioned above, however, most of this crowded lake - and other office buildings, especially in Tokyo - are expected to reach the market by the end of 2021 - with investors waiting patiently to set up their capital by staying, ready to strike as soon as this happens - perhaps too far away. Often the owners of these tourist companies benefited most since the inception of "Abenomics" in 2012. They will inevitably wish to profit with their eight-year profit before the end of the economy.
Combined accommodation has been one of the most popular options in the entire APAC region over the years. It has taken a big hit, for a good reason. Sharing accommodation with strangers is not the only effective employer strategy in the world.
Despite being walloped by the epidemic, sales have somehow avoided the complete melting, which is part of the permanent existence of highways, trains, and subway stations, where tariffs have risen sharply this year.
While Japan has not escaped, in any way, the impact of the global Covid-19 epidemic and the economic downturn that has plagued the country's economy. The only country in the region that has seen an increase in prices and costs by South Korea - Japan. Trade prices fell by 22% year-on-year by September 2020 - placing Japan at the top of the "lost table" compared to the five most active markets in the region, as estimated for the year.
In addition, while Japanese investors, as usual, tend to "stay on their toes" when instability arises. Unlike South Korean investors, who focus on their savings on home purchases rather than overseas businesses, the influx of foreign buyers into the world is safer place.
Finally, the fact that Japanese homeowners, giant corporations, and institutional property owners tend to be more economical also affects the price of real estate. Many of the country's principal assets owned by domestic companies, which can use the "wait and see" method to hope that an immediate crisis, will speed up the national and global economy. Things are different in many ways, however, as we will see below - and they are likely to change dramatically as we enter 2021 with any sign of recovery over time.
Demand and transformation are key to Office and human settlements
While some investors are defending the office sector for fear of speakers in the 2021 and 2022 vacancies, the prevailing view is that, rather than going down ultimately, there is a good chance that both sectors will experience significant changes in material preferences.
The above scenarios have created a complete storm. Smart offers may only be available in critical areas - price discounts that may only be available for a month or two.