Foreign investment in Japan’s real estate sector soared in the past year thanks to the weak yen while the country’s central bank maintained a loose monetary policy. The tourism, commercial, residential, and industrial real estate segments in the land of cherry blossoms are all providing attractive investment opportunities for foreign investors.
“This is the golden age of Japanese real estate,” Henry Chin, head of Asia-Pacific research at real estate consulting firm CBRE, said in an interview with CNBC.
Another factor supporting real estate is the cheap yen. The Bank of Japan (BoJ) kept its benchmark interest rate at -0.1%, making it different from other major central banks, which have raised interest rates continuously over the past two years to curb inflation control. As a result of the monetary policy, the yen has fallen more than 11% against the US dollar this year.
Koji Nato, Director of Capital Market Research of global real estate services firm JLL in Japan, in the first quarter of 2023, foreign investment in real estate increased 100% over the same period last year, to 2 billion US dollars.
In a report released in September, consulting firm Knight Frank said that the solid recovery of Japan’s tourism industry after the easing of border restrictions has boosted room occupancy and investment activities. hotel. In July, Japan saw the highest number of foreign visitors since the Covid-19 pandemic.
In addition, hotel investment activity was also boosted after Japan gave the green light for the construction of integrated resorts in Osaka, where the country’s first casino project is expected to open. The project aims to attract both international visitors and domestic spending.
Importantly, according to investors, Japan has moved into a period of long-term political stability. Until 2012 when Mr. Shinzo Abe became prime minister, the position of the head of the Japanese government changed constantly, at an average rate of about every 18 months. Mr. Abe and Japan’s current Prime Minister, Fumio Kishida, have held this position for a total of 10 years.
Expert Henry Chin also believes that Japanese real estate prices may be extremely sensitive to any decision to increase interest rates by the BoJ. However, he expects investors to continue deploying capital into Japanese real estate in the coming quarters.
(Theo CNBC, Financial Times)
