While a distribution of large capital gains is expected in emerging market countries, we often experience fraudulent investment acts due to a lack of legislation and development of law, or instability of public security and the political situation. Investments in emerging markets are high-risk ones that are suitable for only those who can afford to gamble for high returns. Such investments may not be suitable for investors who want to play it safe with their investments.
Although it is difficult to expect huge economic growth in Japan, customers can trade safely under comprehensive investor protection laws and established transaction procedures in the country, which also happens to be Asia's most developed country as well as its most mature economic power. Additionally, well-maintained public security (Tokyo was awarded the 1st prize of The Safe Cities Index 2015 by the British newspaper 'The Economist') and a small gap between the rich and poor allows for rare incidence ratio of troubles with tenants, making it suitable to invest safely and expect a stable return.
Property management and maintenance in Japan has an established reputation for being detailed as well as high in quality. Even old buildings have maintained their quality and performances with proper and regular equity maintenance. Additionally, information on long-term yield on invested properties provides support for long-term assessment from customers' perspective. Well-developed networks and systems for rental properties enable investors to find new tenants in case of vacancy within a relatively short period.
Tokyo is one of the biggest metropolitan cities in the world and has a mature real estate market that provides a variety of properties in numbers and types. It allows investors to select properties suitable to their styles and ideas and find property investors easily in case of sell-off, thanks to a large number of market participants.
Ownership of a property (particularly for land) by overseas investors is generally restricted in many Asian countries. In Japan, however, the right to own private property is completely guaranteed by law. This guarantee is also applied to the ownership of a property, whether by an individual or an enterprise. A person with no Japanese citizenship can buy, hold, and sell property in the same manner as Japanese citizens without any restrictions or political, economic, or social discrimination, and regardless of nationality and residence or status of residence.
Although the total population of Japan is declining due to low birth rates, the inflow of people into Tokyo from other prefectures continues to increase because of the relatively higher unemployed-to-job openings ratio and wage standards. The population of Tokyo is rising, and the trend is expected to continue.
Furthermore, once the Trans-Pacific Partnership is enacted, a considerable number of residents from overseas are expected due to the relaxation of regulations imposed on foreign-invested companies and non-Japanese workers.
Japan experienced a serious recession period called the 'Lost Two Decades' after the Japanese asset price bubble's collapse in the early 1990s.
As shown in the graph below, the land price in Japan has continuously declined since its peak in 1991, and Japan has long suffered from the aftereffects of the bubble economy for twenty years. However, the Liberal Democratic Party's return to power in November 2012 has led to the strong appreciation of the yen and high stock prices. With the launch of Abenomics under the second Abe cabinet and the Tokyo 2020 Olympic Games announcement in 2013 as triggers, stock and property prices have indicated an upward trend.
The number of overseas tourists visiting Japan has shown a significant increase in recent years, surpassing September 2015 the total number of overseas tourists in 2014 (total 13,410,000 people). This rapid increase has, however, been putting chronic pressure on regular hotels in Tokyo, leading to a rising demand for properties. One good solution to this problem is to allow vacant apartments to be rented out as hotel rooms for business travellers. Government acts on National Strategic Special Zones have allowed apartments and single-family homes to be rented out to tourists under certain conditions, leading to the possibility of an increased rental yield compared to the regular rental rate. (This has not been effective yet, as the ordinance of intended areas has not been legislated. Legislation on intended areas is expected this year).
Data taken from JNTO (Japan National Tourism Organization)
Note:Data for 2015 indicates figures between Jan and Sept.
Tokyo has been named the top city and been highly evaluated for its 'defining paradox of heart-stopping size and concurrent feeling of peace and quiet' in 'The Monocle Quality of Life Survey 2015', featured in British global information magazine Monocle, July/ August 2015. (http://monocle.com/film/affairs/the-monocle-quality-of-life-survey-2015/)
The wealthy class in China, Taiwan (according to cnYES, the most well-known investor website in Taiwan, Taiwanese investors' investment in the Japanese property market amounted to 54 billion yen in 2014), Hong Kong, Singapore, and other South East Asian countries such as Malaysia have invested in the Japanese property market, particularly in Tokyo's property market. Additionally, not only individual investors but also big overseas companies and the SWF (Sovereign Wealth Fund) have started to invest in Tokyo's property market. Some examples are Wuhan Greenland Center, the biggest real estate agency in China, which announced that it would start investing in the Japanese property market in September 2015; and the Government Pension Fund of Norway, the world's biggest SWF, which opened its branch in Tokyo to expand its business of property investment in October 2015.
The exchange rate of the Japanese yen to the US dollar was 120 yen in November 2015; this indicated a sharp drop in value by 36.6% compared to the rate in 2011 (75.98 yen) within just four years. This means it used to cost 1.3 million USD to purchase a real estate priced at 100 million yen four years ago, but one can purchase it today for only 0.83 million USD, 36% cheaper.
It is also possible to expect foreign currency exchange gains by selling acquired properties when the yen is strong.
Our local staff will provide the best investment style and the latest potential property information based on your request and budget.
Our local staff will meet and pick you up from your hotel in our company car to visit properties and provide explanations of its surrounding environment, features, and characteristics.
For busy customers who cannot make time to come to Japan, our local staff will gladly provide analysis, information, and photos of the properties.
Once a purchase decision is made, the investor is requested to fill in a purchase offer for the negotiation of terms and conditions of sales contract. No deposit is required at the submission of the purchase offer.
Under the negotiated terms and conditions, a real estate broker will conduct legal presentations and give due diligence to the buyer, after which both the seller and buyer will approve and execute the contract.
At this stage, the buyer will be requested to pay 5% of the price of the property as a deposit (the deposit is allocated as a part of the acquisition price).
The buyer is required to pay the remainder price inside Japan for the transfer of title and property.
At this stage, the buyer is also required to pay a commission of 3.24% of the total amount of the property price plus JPY 64,800 (in cases where the property price is over JPY 4,000,000) to Asset Partners as a brokerage fee.
If a buyer has difficulty visiting Japan during the time of registration, Asset Partners and a judicial scrivener can make the settlement on behalf of the buyer with a delegation of authority. Once the remainder of the payment is made, the judicial scrivener is to complete the transfer of title.
It will take approximately two weeks to complete the process and issue the notice of information for registration identification.
Starting from the date of the transfer of property, Asset Partners will commence with property management and send the notice of the transfer of title to every tenant. Asset Partners will then make a variety of proposals such as acquisitions, selling, and operations to increase investors' profits.
Additionally, Asset Partners has access to tax attorneys who can introduce our customers to the tax filing process.
Since the start of our business in 2008, we have been serving income property brokerage needs mainly in Tokyo, as well as the property management needs of investors from overseas.
Japan is an overseas country for investors living outside Japan, and investment in foreign property may concern some investors due to the limited information available. At Asset Partners' Tokyo headquarters, we have stationed three English-speaking staff members. Additionally, a bilingual staff member who speaks both Japanese and English is stationed in the Middle East. The aim is to serve our clients' needs by providing correct information, new property proposals, financial consultation, and support for property management and tax procedures. We strive to support overseas investors to acquire and manage properties in Japan.
With our specialty in income property management, we have rich know-how and a proven track record in property investment. We share our successful and unsuccessful investment cases among our staff members, including cases involving Japanese investors. We offer sound advice based on our know-how and proven track record in the selection and the operation of sites, which enables us to win our customers' trust.
We strive to meet and exceed our customers' expectations in light of our business mission, which is to serve our customers' best interests. Our moderate but absolute growth is the result of building long term win-win relationships with our customers to this end.
Asset Partners, Middle East Branch OfficeTel : +974 6653 0162 Mail : email@example.com