{"id":22478,"date":"2020-04-08T17:27:04","date_gmt":"2020-04-08T17:27:04","guid":{"rendered":"https:\/\/adamfayed.com\/?p=22478"},"modified":"2023-11-07T03:17:09","modified_gmt":"2023-11-07T03:17:09","slug":"8-reasons-why-you-shouldnt-invest-in-japan-real-estate-projects","status":"publish","type":"post","link":"https:\/\/adamfayed.com\/it\/real-estate\/8-reasons-why-you-shouldnt-invest-in-japan-real-estate-projects\/","title":{"rendered":"8 Reasons why you shouldn&#8217;t invest in Japan real estate projects."},"content":{"rendered":"<p><strong>This article was updated on March  3, 2021<\/strong><\/p>\n\n\n\n<p>8 Reasons why you shouldn&#8217;t invest in Japan real estate projects &#8211; that will be the topic of today&#8217;s article <\/p>\n\n\n\n<p>Japan has a surprisingly liberal system for foreigners owning property in the country, which flies in the face of the stereotypical notion that the Japanese economy is closed to the outside world.  <\/p>\n\n\n\n<p>This article, however, will list some reasons why you shouldn&#8217;t invest in Japanese real estate.<\/p>\n\n\n\n<p>Se volete investire in modo efficiente dal punto di vista fiscale o farmi delle domande, potete contattarmi&nbsp;<a href=\"https:\/\/adamfayed.com\/it\/#contact-me\">utilizzando questo modulo<\/a>, oppure utilizzare la funzione di chat qui sotto. &nbsp;<\/p>\n\n\n\n<p>For those that prefer visual content, the video below summaries the article:<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe title=\"Perch\u00e9 non si dovrebbe investire nel settore immobiliare giapponese.\" width=\"800\" height=\"450\" src=\"https:\/\/www.youtube.com\/embed\/5JLiKwpoEqs?start=2&#038;feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>1.Japan&#8217;s demographic time bomb <\/strong><\/h4>\n\n\n\n<p>Japan&#8217;s population could fall in half in the next few decades. In that context, and with a stagnant economy, it will be harder for property demand to sustain itself.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"669\" src=\"https:\/\/adamfayed.com\/wp-content\/uploads\/2020\/04\/a1-2-1024x669.png\" alt=\"\" class=\"wp-image-22479\" srcset=\"https:\/\/adamfayed.com\/wp-content\/uploads\/2020\/04\/a1-2-1024x669.png 1024w, https:\/\/adamfayed.com\/wp-content\/uploads\/2020\/04\/a1-2-300x196.png 300w, https:\/\/adamfayed.com\/wp-content\/uploads\/2020\/04\/a1-2-768x502.png 768w, https:\/\/adamfayed.com\/wp-content\/uploads\/2020\/04\/a1-2-81x53.png 81w, https:\/\/adamfayed.com\/wp-content\/uploads\/2020\/04\/a1-2.png 1527w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>With interest rates already at zero, and numerous economic stimulus measures already enacted in the last 20 years, it is unlikely countermeasures will combat this demographic fact.<\/p>\n\n\n\n<p>There might be a dramatic increase in Japan&#8217;s immigrant population in future years, but there is longstanding political opposition to this.<\/p>\n\n\n\n<p>In recent years, the 2020 Tokyo Olympics (now 2021) has been a one-off stimulus for demand, but this won&#8217;t last, once the games come and go.  <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>2. Depreciation <\/strong><\/h4>\n\n\n\n<p>In most parts of the world, houses appreciate in value, even if they don&#8217;t appreciate as<a href=\"https:\/\/adamfayed.com\/it\/propertyvsstockswhypropertyoutperformanceisacompletelie\/\"> quickly as stock markets.<\/a><\/p>\n\n\n\n<p>In Japan, it is taken as given, that real estate is a depreciating asset.  That means that even real estate investors, can only hope to &#8220;win&#8221; from high rental yields.<\/p>\n\n\n\n<p>What&#8217;s more, property is assumed to only have a lifespan of up to 30 years in the country, due to natural disasters and other issues, with families focusing on buying the land, and rebuilding the house.<\/p>\n\n\n\n<p>Even if the house still stands after a huge earthquake, the repairs can be very expensive.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_damaged_house_from_earthquake_in_Japan._b47e68d9-85a9-4de1-a184-29f156ba9e74-512x512.png\" alt=\"\" class=\"wp-image-71881\" srcset=\"https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_damaged_house_from_earthquake_in_Japan._b47e68d9-85a9-4de1-a184-29f156ba9e74-512x512.png 512w, https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_damaged_house_from_earthquake_in_Japan._b47e68d9-85a9-4de1-a184-29f156ba9e74-300x300.png 300w, https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_damaged_house_from_earthquake_in_Japan._b47e68d9-85a9-4de1-a184-29f156ba9e74-150x150.png 150w, https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_damaged_house_from_earthquake_in_Japan._b47e68d9-85a9-4de1-a184-29f156ba9e74-81x81.png 81w, https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_damaged_house_from_earthquake_in_Japan._b47e68d9-85a9-4de1-a184-29f156ba9e74.png 573w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/figure>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>In all countries in the world, maintenance costs and taxes eat into the gross returns, to give you a significantly lower net return on your investment.<\/p>\n\n\n\n<p>In Japan, it is merely a bigger issue.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>3. Uncertain times <\/strong><\/h4>\n\n\n\n<p>During times like the current global epidemic, having a significant percentage of your assets in just one or two illiquid assets, in a foreign country which has been stagnating for decades, isn&#8217;t low risk.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><b>4.  Big bureaucracies <\/b><\/h4>\n\n\n\n<p>Japan is not an &#8220;friendly&#8221; English speaking country as far as business and government goes.<\/p>\n\n\n\n<p>I don&#8217;t mean that the local government workers won&#8217;t be friendly and try to help you, but merely there isn&#8217;t a lot of bilingual support.<\/p>\n\n\n\n<p>This can be an issue, as there is a lot of paperwork associated with paying Japanese taxes, and if they make a mistake, it is still your responsibility to put it right.<\/p>\n\n\n\n<p>Big bureaucracies also caused a problem a few years ago in Japan, when the government cracked down on airbnb rentals, partly to protect the hotel industry.<\/p>\n\n\n\n<p>Overnight, many landlords reliant on good rental yields, struggled.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>5. Language combined with family issues<\/strong><\/h4>\n\n\n\n<p>Following on from the last point, many foreign buyers in Japan, are reliant on a native-Japanese spouse to do a lot of the legal and tax work.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_an_expat_husband_and_japanese_wife_in_the_house._d43a2eed-96ca-43a9-9e1c-7d99552d26f0-512x512.png\" alt=\"\" class=\"wp-image-71883\" srcset=\"https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_an_expat_husband_and_japanese_wife_in_the_house._d43a2eed-96ca-43a9-9e1c-7d99552d26f0-512x512.png 512w, https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_an_expat_husband_and_japanese_wife_in_the_house._d43a2eed-96ca-43a9-9e1c-7d99552d26f0-300x300.png 300w, https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_an_expat_husband_and_japanese_wife_in_the_house._d43a2eed-96ca-43a9-9e1c-7d99552d26f0-150x150.png 150w, https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_an_expat_husband_and_japanese_wife_in_the_house._d43a2eed-96ca-43a9-9e1c-7d99552d26f0-81x81.png 81w, https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/11\/22478_an_expat_husband_and_japanese_wife_in_the_house._d43a2eed-96ca-43a9-9e1c-7d99552d26f0.png 573w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/figure>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>This can often end in disaster if divorce takes place. This point is clearly not an issue for all foreign buyers in Japan, but does affect a significant percentage.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>6.  Mortgage<\/strong> <strong>system<\/strong> <\/h4>\n\n\n\n<p>Even if your house gets destroyed by a disaster, you are still liable to pay for the mortgages.  <\/p>\n\n\n\n<p>Of course, Japan isn&#8217;t the only country to have this system &#8211; the UK and others follow a similar system &#8211; and there is liability insurance.<\/p>\n\n\n\n<p>Merely, for a country which is prone to natural disasters, this could become a big issue for you.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>7.  Retirement <\/strong><\/h4>\n\n\n\n<p>I have met countless expats in Japan. Some are happy, and some aren&#8217;t.  <\/p>\n\n\n\n<p>One commonality is that I have seldom met a Japanese expat that plans to <a class=\"wpil_keyword_link\" href=\"https:\/\/adamfayed.com\/it\/how-to-retire-in-japan-2022\/\" title=\"retire in Japan\" data-wpil-keyword-link=\"linked\">retire in Japan<\/a>. <\/p>\n\n\n\n<p>This fact, compared with the aforementioned short lifespan of most Japanese homes, means that it is harder to use housing in Japan as a home rather than an investment.<\/p>\n\n\n\n<p>In comparison, in the UK and large parts of Europe, you can merely buy a home for the ultra long-term (literally death) and not care if the property goes up or down in value.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>8. The alternative <\/strong><\/h4>\n\n\n\n<p>Ci sono molti<a href=\"https:\/\/adamfayed.com\/it\/investment-options\/a-look-at-the-best-investment-option-for-expats\/\"> alternative expat investments<\/a>, that are more liquid, and in most ways safer, than such a depreciating asset as Japanese real estate. <\/p>\n\n\n\n<p><strong>Conclusione<\/strong> <\/p>\n\n\n\n<p>Using Japanese real estate as either a home or an investment, is fraught with dangers compared to the alternatives.<\/p>\n\n\n\n<p>If you are living in Japan, it is better to rent. If you are an overseas buyer, there are better real estate markets out there.<\/p>\n\n\n\n<p><strong>Ulteriori letture <\/strong><\/p>\n\n\n\n<p>If you live in the UK, what sort of property taxes do you have to pay, especially if you are an expat?<\/p>\n\n\n\n<figure class=\"wp-block-embed-wordpress wp-block-embed is-type-wp-embed is-provider-adam-fayed\"><div class=\"wp-block-embed__wrapper\">\nhttps:\/\/adamfayed.com\/uk-property-tax-for-expats\/\n<\/div><\/figure>","protected":false},"excerpt":{"rendered":"<p>Why you shouldn&#8217;t invest in Japanese real estate<\/p>","protected":false},"author":52,"featured_media":22480,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_10166176115445471_100883565069113":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[11545],"tags":[],"class_list":["post-22478","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate"],"_links":{"self":[{"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/posts\/22478","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/users\/52"}],"replies":[{"embeddable":true,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/comments?post=22478"}],"version-history":[{"count":0,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/posts\/22478\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/media\/22480"}],"wp:attachment":[{"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/media?parent=22478"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/categories?post=22478"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/tags?post=22478"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}