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When it comes to real estate investment opportunities, Japan truly distinguishes itself. Here are three compelling reasons why:
1. Japanese real estate prices have been on a downward trend (in real terms) since the early 90s, following the burst of the real estate bubble. Today, a property purchased in 1991 in Japan is valued at just 53.6% of its original price (in real terms).
2. Japan boasts the lowest real estate prices (in real terms) among developed nations.
3. Unique among first-world countries, Japan has a price-to-rent ratio of less than 100%. Sitting at 62.6%, this ratio suggests that in Japan, the buy-and-rent approach to real estate investment is more profitable than the buy-hold-sell strategy. Simply put, buying property in Japan is affordable, and the return on investment through rental income is faster than in any other developed country.
As a result of these advantageous conditions, investors are increasingly drawn to the Japanese real estate market, aiming to generate income through renting. However, due to Japan’s declining population, sourcing tenants has become a challenge. Furthermore, the balance of power is shifting towards tenants, who now have more choices than ever, compelling property owners to reduce rents to stay competitive.
But don’t let this deter you. Here at JDJC Invest, we have utilized these market conditions and devised a solution to this problem that significantly enhances the profitability of investing in Japanese real estate.