While Japan has much to offer on the employment front, the property market has been shunned by foreign nationals and foreign investors due to the high cost of good quality property as well as the ever present risk of earth quakes.  While major earth quakes are world breaking news, there are a number of smaller quakes which go relatively unreported outside of the country.

As some of the better quality properties in areas such as Tokyo can cost upwards of $450,000 this, and the fact there are foreign ownership restrictions, has resulted in a limited foreign national property market until now. The recent boom in property prices and a relaxation of foreign ownership regulations (as well as an increased likelihood of obtaining a local mortgage) has started to attract foreign investors and Expats living in Japan .

The country has always been one of intrigue to many, swamped in history and a very clear culture which has evolved over thousands of years.  Together with neighbouring China, Japan has an economy which can stand head to head with any in the Western world.  The political environment can however be a little difficult to understand, with the authorities often making snap-shot decisions in the event of problems or concerns with the country - this uncertainty has effected both the economy and property markets over the years. 

Contents: Property Market Performance in Japan | Property Costs in Japan

Property Market Performance in Japan

The Japanese property market is very closely connected to the Stock Market which saw a massive fall in the 1980s.  Just before the falls in the stock market, property prices had been bounding ahead with prices just not sustainable in the longer term.  When the markets began to fall, investors rushed out of the property market which remained in the doldrums for years afterwards.  Over the last couple of years, due partly to the relaxing of foreign ownership restrictions, investors are coming back into the property market.

As with Thailand and its largest city, Bangkok, Japan has a two tier property ladder with Tokyo miles ahead of the rest.  Tokyo has seen annual rises of 30-40 per cent in land prices, which are in great demand for new property builds.  While there are genuine concerns that property prices in general are moving too high too quickly, they are still only at 50% of the levels reached in the 1980s (an example of how far the market had risen!)

Slowly but surely Japanese prime property is being priced out of the range of many foreign nationals, although prices are not as high in some of the less economically active areas of the country.  The concern is that immigrants will need to work, and the main work is in and around Tokyo - although Japan has an excellent transport network which many foreign nationals need to check out very soon!

Commonly referred to as the land of the rising sun, Japan has a beauty and culture all of its own.  While property prices continue to rise, and Western companies continue to flock to the area, there seems little likelihood of property prices falling back too far.  But then again, the real risk of earth quakes is never too far away.  

If you are considering moving to Japan, you really need to do your research, and go into the country with your eyes wide open.  Renting may turn out to be your only real option.

Property Costs in Japan

Historically foreign nationals had to prove that they had lived in Japan for a certain number of years before they could even be considered for a mortgage.  This was in the days when the government were very protective of the property market, but since the massive falls of he 1980s, regulations have loosened a little and the banks are not quite as strict.  It has also helped that many of the financial institutes have been removed from government control and are now formulating a commercial policy towards business.

From start to finish the process of buying a property can be over in 4 to 5 weeks, and generally you can expect to pay an additional 8% of the asking price in taxes and charges.

The area of mortgages does need further investigation, and it is vital that local experts are appointed to assist with the legal and practical areas of purchasing a property in Japan.