Buying a home is a big deal and should not be taken lightly. However, lots of foreigners are buying home in Tokyo. Some important factors to consider include the types of property, affordable repayment, area of stay, and desired tenant. Location is probably the most important factor, as this will determine who your tenant pool will be and how easily the property will be to sell in the future. There are dozens of reasons that make Tokyo a great choice if you are thinking about buying a property, so let’s take a look at it.
Japan is known for its stable economy, it is relatively stable when compared to other advanced economies. Prime Minister Shinzo Abe continues to introduce the stimulus measures which have been the hallmark of ‘Abenomics’ since 2012. These measures had made positive impact for the Japanese property market (which earns investors moderately good rental returns).
HIGH OCCUPANCY RATE
The occupancy rate in Tokyo is relatively high, though Japanese population is shrinking, however it is expected to increase as more foreigners immigrate under Japan’s newly relaxed visa regulations. Makes the city residential occupancy rate goes up to above 96%.
The cost of living in Tokyo is relatively cheap compared to other major cities. By leveraging the currency exchange rates, you may be able to get more advantage in big amount of purchase. Nevertheless, for those who are renting in Tokyo, you can own the apartment by paying lesser than your current rental, especially for PR residents (100% mortgage loan).
In Japan, a foreigner who rent, pay higher tax than a foreigner who own his property (reduced tax rate with property ownership). This has attracted many foreign workers to buy property in Tokyo. Nobody wants to pay high taxes, and this is why the foreign workers are buying property now.
FREEHOLD LAND OWNERSHIP
Nowhere else in Asia can you buy freehold land as a foreigner. Other Asian countries such as Vietnam, where foreigners are only allowed leasehold ownership of property, and Thailand, where foreigners cannot own land at all. Even if at one point in the future the house is destroyed, what will always endure is the land beneath it.
In summary, buying a property in Tokyo is ideal for those who are working abroad in Tokyo and also for those who looking to diversify out of the real estate market in their own country. Tokyo real estate investors can enjoy many benefits, such as reduced tax burden, a stable economy and a peaceful political environment. With the upcoming Tokyo developments, now may be the best time to invest in Tokyo.