Japan land prices up for 2nd year in post-COVID rebound

Know plenty of rich foreigners and NOT ONE has bought land in Japan in +ten years, but mansions sure with a clear ROI path and ability to rent out if relocating etc.

Foreign money drives up this change. UK 2.0 is in the making!

Land prices will go down but the price of the home never gains any equity. Basically you are paying for a cad board box once it gets soggy and fall all you have is the land that's left and most times its worthless.

That was true until the 1980s but isn't true now. Nobody would demolish a twenty year old house built in 2000.

That's not my experience though. I visited many secondhand properties recently and in my experience a lower middle-class or middle class house in the median price range made about 20 years ago is made of cheap non-insulated windows, zero heat insulation on the outer walls, and cheap treatment against termites and other parasites to protect the foundations. Plus all of them came with the same cheap kitchen cupboard and injection molded boring quickly molding bathroom.

I saw some nice properties too which I wouldn't tear down. But those were the exceptions not the norm. And they were definitely not in the median price range.

Can’t do up and sell homes for a profit here

You can in Tokyo. Old apartments even have been going up. Even if you only get your money back, that's 100,000 or more saved on rent every month.

Real Estate is all about location specifics. It's wrong to make broad simplifications.

USD purchases are a major player in Japan actually.

Realize, US S&P 500 has roughly outperformed Nikkei 225 by 15X in last 30 years, despite BOJ's purchase of assets, including MANY Japanese Equity and REIT ETFs

Above 'equity asset inflation's missing in Japan for many reasons but at CORE of why land prices have been falling entire this 30year period on any basis that adjusts for occasional 'imported' inflation like we're having now...

Unlikely investments in land will perform, so no surprise everyone wants a mansion, as why finance land so tied to TERRIBLE demographics and economic growth?

Where are all these countries with VERY high debt loads that suddenly have great demographics and economic growth? Higher taxes, now that's the safer bet!

Another 'happy headline', prices up for everything including land as Japan finally has significant inflation. Nobody believes recent official 4.2%, especially since BOJ BUSY printing money to help mitigate food and energy inflation, but whatever real inflation, FAR higher than tiny land price increases mentioned.

Somebody explain how a shrinking aging massively indebted country with WORST productivity growth THIS CENTURY in the G7/OECD/G20 etc., ever achieves sustained durable healthy inflation?

It's obvious current inflation in Japan's not healthy demand wage/productivity based but rather unhealthy supply side/imported in nature, not even a debate.

If land's SO GREAT, why won't commercial banks here provide mortgages on vacation properties? Why are there SO MANY empty homes and more every day, last count some +10M, including many in western Tokyo fyi!?

@daikaka

1/3 of the guys on major dating sites using proven income statements are making over 20M annually. 

FYI people with over 20 mio of income in Japan are in the 95 th percentile (which means they are in the top 5 %). Your Lambo stories are just anecdotes. 5 % is quite irrelevant for the economy as a whole.

Tokyo teal estate prices are extremely undervalued relative to the world. I can see it easily double.

Who will buy those property, wage still stagnant for average Japanese people.

The government numbers is wayyy off at least for Tokyo wages are high as hell. 1/3 of the guys on major dating sites using proven income statements are making over 20M annually. The expensive establishments are always booked full. Even in a middle class neighborhood like mine I constantly see people having parked Benz’s BMWs and Lexuses with occasional Lambos. I definitely do not see there is a lack of wealth, in fact I see excess wealth. Keep in mind that many Japanese companies offer so many subsidies for housing, kids etc that real income is much higher than reported.

Can’t do up and sell homes for a profit here , the house is only the land value so We bought back in Aust during covid and since then prices up 25-40% it’s crazy. But it’s all relative when we sell and re- buy, just keeping up with inflation. Owning a home is becoming impossible there for most.

Ide said prices of residential areas have risen as many young or single people who were forced to spend more time at home during the pandemic came to place more emphasis on the convenience and functionality of their home spaces.

This isn’t a reason, it’s just a waffle of an opinion

Less than inflation so prices diminishing in real terms.

The japanese land market is just simply stupid. Buying a land for outrages prices just in order to build a shack which the wind blows through and deteriorates in 20 years so bad that you have to tear it down and build another shack, makes zero sense.

That was true until the 1980s but isn't true now. Nobody would demolish a twenty year old house built in 2000.

The theory of purchasing power of the yen is probably true. What matters is real estate is going up in more and more parts of the country. In some places it's even on old apartments.

My guess is, that it is simply inflation based and has nothing to do with an economic revival , end of corona and all such. I mean, not only a poor family has more to pay for eggs, but also a rich land owner or company has higher cost burdens to cover. The difference is of course that they can hand over big parts of their higher costs to their land buying or renting customers.

The japanese land market is just simply stupid. Buying a land for outrages prices just in order to build a shack which the wind blows through and deteriorates in 20 years so bad that you have to tear it down and build another shack, makes zero sense.

Deflation years are behind us.

I noticed houses around me increased roughly 10 million yen since I bought it back in 2021. Super glad I bought it then when people around me were saying to "wait until after the olympics" or "wait until ___".

Who will buy those property, wage still stagnant for average Japanese people.

https://www.japantimes.co.jp/news/2023/03/07/business/economy-business/japan-wages-down-january/