Japan’s Investment Property Market – 2016 Summary, 2017 Forecast

Jason BallByJason Ball

This post comes from NTI (Nippon Tradings International) – a proxy and buyers’ agency, representing investors purchasing real estate in Japan. You can find more of our posts tagged NTI and/or JapanProperties and can follow us on LinkedIn or Facebook.

To begin the new year, we analyzed last year’s forecasts, compared them with current trends and numbers, as published by regional industry leaders, and attempted to estimate what this year will bring to Japan’s real estate investment arena. We looked at rising prices in Tier 1 cities of Tokyo and Osaka and the resulting trickle-down effect of investments into secondary tier markets.

Highlights:

  • Tokyo, Osaka, Nagoya and Fukuoka saw slight price increases of 0.4% to 2%, while across Japan, residential land prices dropped slightly by 0.4%, and commercial land prices flat-lined.
  • Centres of large cities experienced lack of growth due to cost of living, rental increases and a slight drop in salaries.
  • Oversupply of new buildings in Tokyo led to an increase in residential vacancies in the area.

Additionally we discuss the quest for yield as the new mindset of investors in 2017 in the unpredictable geopolitical climate (Brexit and the new US administration). With limited opportunities in traditionally safe markets, it is expected that foreign investment capital will continue to flow into Japan for the benefit of both a safe haven and high yield.

In other growing property market sectors, Japan’s buoyant hotels and hospitality property market face rising international tourism as Tokyo prepares for the 2020 Olympics. With growth in the e-commerce market, the warehouse and logistics properties sector expands to keep up with the need for same day service. And, the rising demand of senior-assisted living shows signs of the next profitable investment market.

For the complete analysis read here: http://nippontradings.com/japan-real-estate/japans-investment-property-market-2016-summary-2017-forecast/

Priti Donnelly is the sales and marketing manager at Nippon Tradings International, a proxy and buyers’ agency representing foreign investors with purchasing, selling and managing real estate in Japan.