Latest Market Information

2018-10-29

Japan market update. How are big players betting ? : Is it in the state of bubble ?

JLL-Japan (JLL is an American professional services and investment management company specializing in real estate) recently held the conference in Tokyo with 400 participants from 250 companies.

JLL reported very bullish news about Tokyo market as follows:

“Tokyo overtook London as the world’s busiest real estate market in the first quarter of 2018, with mega-deals and an unusually positive economic outlook driving demand.

Investment volumes in the Japanese capital more than doubled to US$9.1 billion in the three months to March (2017: US$4.3 billion), just beating New York (US$9 billion) and way ahead of third-placed London (US$5.9 billion).

Global deal volumes rose 15 percent to US$165 billion, making the start of 2018 the biggest quarter for commercial real estate deals since 2007. Asia Pacific transactions rose 34 percent to US$40 billion.”

Tokyo will continue to see the many office construction sites till 2020 and it would make the rental growth slow but the rents have been steady and are still rising.

According to a report by the prominent Japanese real estate consulting firm ‘Sanki shoji’, the vacancy rate of offices in upscale locations in Tokyo as of September 2018 stands at only 2.33 percent (down 0.12 percent from the previous month) and the rents have been steadily rising in last twelve months.
Read more

2018-07-21

Japan’s real estate price update: Price up for 3 consecutive years. Very strong growth in Tokyo buoyed by the booming inbound tourism

by Yamamoto

(Ginza, Tokyo)

The results are in. You will be surprised to learn that Japan’s real estate price -at least some spots are- is breaking the record set during the bubble period.

On July 2, 2018, the National Taxation Bureau announced the average value of a square meter of land for tax assessment as of January 1 2018.The nationwide average price went up by 0.7% from the previous year and it increased for three consecutive years. By prefecture, growth is high in the three major metropolitan areas such as Tokyo (up 4.0%), Osaka (up 1.4%), Kyoto (up 2.2%), Aichi (up 1.5%)The rate of growth is higher in all three major metropolitan areas than the previous year.The rate of growth in core local prefectures is rather high such as Hokkaido (up 1.1%), Miyagi (up 37%), Hiroshima (up 1.5%), Fukuoka (up 2.6%).Average price in Okinawa was up 5.0% and it is the highest rate of increase in Japan.
Here are some key facts.

Tokyo
In Tokyo metropolitan, the average price went up 4.0%, the five consecutive years.
Ginza Chuo-dori has broken its record high for the second year in a row.The top appreciation in Tokyo was 15.8% at Aoyama Street, Minato-ku, Aoyama 3, which is also an upscale residential area. A number of luxury brand flagship stores are located in the area.In terms of growth rate, Aoyama regained the top place for the first time since 2007.The second spot is Adachi-ku Senju 3’s Kita-Senju Station West Exit Square and it went up by 14.5%.In addition to the revitalization of the area due to the effect of a few universities campus being relocated, the convenience to the center of Tokyo boosted it.
These are the some major and the most expensive spots in Tokyo 23 wards.
(price per square meter ‘000 yen and the growth rate)Read more

2018-07-09

Is it end of booming real estate market in Japan ? : Kenbiya latest quarterly report June 2018

by Yamamoto

(Nomizo -no-taki(Nomizo fall), Chiba pref)
Is a tidal wave finished in Japan ? It is about time to to buy a property ?
Japan’s one of the major online web sites for the investment properties ‘Kenbiya’ recently announced the latest market trend on the properties that are registered on the site in Japan.
It is not an official report by the public sectors but the research shows the quick snap shot of the market trend.The research results cover the period between April 2018 and June 2018
on properties in Japan for each market segment.
Let’s take a closer look at the result.
Overview on all Japan
Condo unit
The gross yield of registered properties is almost unchanged at 7.69% ( minus 0.02 points compared with the previous term).
The average price fell slightly to 14.24 million yen (-3.85% from the previous term).
Residential apartment building
The gross yield of registered properties rose slightly to 8.91% ( plus 0.13 points). The average price is 67.4 million yen ( minus 2.06% from the previous term).
The average price for the apartment buildings declined for the first time since 2013.
Residential condo building
Registered yield slightly increased to 8.06% (plus 0.09 points).
The average price slightly went up to 16,329,000 yen (plus 0.66%)

2018-07-08

New Survey Reveals the Bank loan Is the Biggest Challenge Facing in Real Estate Investment in Japan: But investors are still bullish

by Yamamoto

Are you bullish or bearish ?
Two surveys by the major institutions revealed that both institutional investors and individual investors are bullish about the real estate market in Japan.
In the survey released by the Japanese real estate research institute in May, real estate price has been rising steadily due to the recovery of corporate performance and the expectations for the Tokyo Olympic Games and Abenomics.
The survey was conducted mainly for institutional investors.
However, 72 % of respondents say the real estate investment market is seeing the peak for the time being.
83.2% of respondents say many deals with remarkably low yields are appearing, compared to 68% in the previous survey in October 2017.
As for the view on investment in the next coming year, 90% of respondents say they will actively continue to make investments, up one point from the previous survey.
It indicates that the general consensus is still bullish.
Only 8% of respondents say they will be stopping the making new investment. Regarding the real estate market, attention is paid to interest rate trends in the United States and the monetary policy of the Bank of Japan.

As a whole investors’ willingness to invest is very positive
Regarding market expectation, the majority of institutional investors say that the market will expand in the next 6 months in both Tokyo and Osaka.Read more

2018-06-15

Where is the most attractive city to invest in Asia ? : CBRE institutional investors reports 2018

by Yamamoto

(Kamogawa city in Chiba) (Kominka-tradtional Japanese folk house-)
Are you curious about where the most attractive city in Asia to invest is ?
CBRE, renowned global real estate company, recently published a report on Japanese investment market called “CBRE Investors Survey 2018” According to the report while domestic investors’ willingness to invest remains high but the marker can see a somewhat prudent attitude and a move to seek an alternative investment.
Foreign investors targeting the Asia-Pacific region ranks Tokyo as the most attractive city and local cities (7 cities in the region such as Osaka, Fukuoka as one category) in Japan as the seventh place.
In 2018, the interest from overseas investors to Japan is expected to further grow.
Here are key points from the report
While Japanese investors have increased willingness to sell, the intention to acquire is somewhat lower.
According to the report, 63% of investors in Japan said they would acquire the same volume as in 2017, an increase of 5 points from 58% in the previous year.
Meanwhile, 29% of investors responded that they will increase from the 2017 acquisition, a 9 point decrease from 38% in the previous year.
The overall result is that more than 90% of investors are still assuming investment trajectory shall be equal to or higher than the previous year. Nonetheless, the trajectory also decreased by 5 points from 96% in the previous year. The willingness to acquire assets seems to be somewhat declining.
On the other hand, the willingness to sell is somewhat increasing.Investors who said they would sell the similar volume as the previous year, is 62%, decreased by 7 points from the previous year,34% of total said they would increase sales from the previous year, an increase of 14 points from 20% in the previous year.Overall, 96% of the total is projecting plan to sell equal to or greater than last year.

2018-03-05

2020 Tokyo Olympics revamping central Tokyo

by Yamamoto

(Current JR East ‘Harajuku’ station)

Tokyo will host the Rugby World Cup in 2019 and Olympics and Paralympics in 2020.
In view of the two big events and rapid growth of the inbound tourism, In Tokyo, there are a number of revamp projects in the pipe line now.
Today I pick up one of the projects by EAST Japan Railway Company (JR East)
involving Sendagaya station which is the closest station to the new National Stadium and Harajuku Ekimae project by NTT group.
Tokyo and neighbouring cities have been developed sufficiently and in a sense have been seeing the matured status
over the years,however, when the new development plans are revealed by the developers and the railway companies,
the real estate price in the redevelopment area picks up and price hike is likely to continue for over several years.

2018-02-25

Is it the good time to buy a property in Tokyo ? – Quick recapitulation on condominium market in Tokyo in 2017-

by Yamamoto

Tokyo kankei (Japan’s institute for real estate study) recently announced
the market report on the condominiums in greater Tokyo area.
We have made the recapitulation of the report for the clients.
I will share a part of our report today.
Both prices of newly built second-hand condominiums and
unit price per square meter has gone up.
New construction projects were supplied mainly in central area of Tokyo
which sharply makes price rise.
The average price in the Tokyo metropolitan area (Tokyo and neighbouring cities) of newly built condominiums was 55.44 million yen, up + 9.0% from the previous year’s 50.87 million yen.
Because it was falling the previous year, it rose for the first time in two years, and the
whole metropolitan area shows a trend of rising again from a high stop.
The reason for price rise was due to the strong tendency of supply to concentrate in central Tokyo.
The average area for each condominium was 63.24 square meters, which was up 3.1% from 61.33 square meters in the previous year.

2018-02-08

The latest news on the Japanese property market

by Yamamoto

I am studying a few reports on the current Japanese property market.
I will share my detailed analysis on this blog soon.
Over all, the Japanese market is steady.
According to the Government’s announcement in July 2017,
the national average standard price of land
rose by 0.5% compared to the previous year and it increased
for the second consecutive year.
Land for stores and hotels rose as the number of visitors to
Japan increased and redevelopment became a driving force in urban areas.
Ginza, Tokyo cracks a mark of price of the bubble period (late 80’s)
for the first time in 26 years.
Land prices of Ginza 2 chome in Tokyo exceeded the price during the bubble period.

2018-02-08

Is Japan really shrinking ?

by Yamamoto

Every day in the traditional medias and social medias, I encounter the news
discussing rapidly greying Japan and the shortage of labour with rather gloomy tone.
According to the official survey announced by the government in August 2017,
the total population (excluding foreign nationals) of Japan was 125 million,
decreased for eight consecutive years.
It decreased by 300,000 from the previous year, and was the highest drop since the survey
started in 1968. The number of registered foreign residents was 2.32 million.
In the meantime, the government also announced that Japan’s economy
expanded for the seventh straight quarter in July to September (2017),
the longest growth since 1994. So what is going on in Japan ?
Ironically the vigorous economy also highlights a chronic labour crunch
caused by the country’s ageing, shrinking population.
Japan now relies heavily on foreign labour, and experts have been
urging more public debate on immigration policy as Japan
continues to age and shrink.Read more