House prices will continue to rise in the coming months as demand and construction is being boosted by Tokyo’s successful bid to host the 2020 Summer Olympics. Condo prices in 23 wards of Tokyo have increased by 13.7% in 2017 compared to January 2016, according to the Real Estate Economics Institute.
Low interest rates in Japan are another reason rising house prices — as the interest rate has been at 0.3% since 2009.
In Tokyo, properties are now priced around US$1,323 per square foot (sq. ft.) as of July 2017 and gross rental yields range from 3.4% to 5.4%.
In Osaka, house prices are at US$586 per sq. ft. and rental yields are around 2.5%. Meanwhile in Kyoto property prices are at US$397. Profits are higher in smaller apartments and have solid yields of 5.42%.
While real estate investments are expected to bring in good tourist related profits in 2020, it is still a bit of a gamble as to whether purchasing one is a wise choice — as once the Olympics are over, some experts are anticipating house prices to fall.
Meanwhile, it must be taken into consideration that Japan has a steady stream of year round tourists and after the devastating 2011 earthquake and tsunami Japan strengthened its tourism promotion efforts.
The number of non-Japanese buying property in Japan is increasing due to the imminent Summer Olympics and the falling of the Japanese yen. Non-Japanese are becoming real estate owners of condominium units in Tokyo and resorts in Hokkaido.
A non-Japanese may own property in Japan and there is no time limit on proprietary rights. Property can be bought, sold, and inherited freely. In addition, non-Japanese pay the same taxes as locals.