Japan Real-Estate Market Analysis
2012-13 Asset Purchasing Strategy
Focus – Central South-Western Japan
Fukuoka & Kumamoto – Kyushu
* In Q4-2012, Fukuoka City’s property prices have been rising, for the first time since 2008 – responding to Kyushu’s position as Japan’s “alternative” new metropolitan centre – a status that has been even further cemented, as it becomes the nation’s “Green Energy Mecca“, too – Multi-billion dollar world-class solar and offshore wind farms are being announced on a regular basis, constructed by giants such as Mitsubishi, Hitachi, SoftBank and Nippon Steel. If you’re still not invested in Fukuoka, Kumamoto or elsewhere in Kyushu, NOW IS THE TIME TO ACT!
Nestled along Japan’s western seacoast, approximately 1,100 km west of Tokyo, Fukuoka prefecture is the main metropolitan area of Japan’s Kyushu island (in map, above) – a huge mass of land equalling about half of Honshu, Japan’s mainland, and the portal to South-Korea and China, Japan’s prospering neighbours to the north-west. Fukuoka city, the prefectural capital, is home to approximately 1.5 million people, with core family population figures (couples plus young chilren) rising in recent years – this in sharp contrast to the rest of Japan, which suffers from an ageing population syndrome, and is currently contemplating an increase in migration rates for the first time in its history.
The Larger Picture
Sharing the Japanese economy’s resiliency, the Global Financial Crisis has barely impacted Fukuoka realty prices, with the average price per deal dropping by only 5% between 2008-2011 – years which have seen western economy unravelled and lying in shambles.
This in itself would represent a huge investment opportunity in the old economical environment, when capital gains could be depended upon – this, unfortunately, is no longer the case, and our recommendations must rely on more than that – Fukuoka prefecture has also been the target of a large exodus of Tokyo businessmen and company employees since the March 11th disaster struck Japan, resulting in small to medium apartments becoming immensely popular – and although prices have not yet gone up, the vast influx of Chinese investors crossing over from the north-west and purchasing large quantities of investment properties, would seem to also indicate the promise of this area.
Another hint are average salaries in Fukuoka prefecture – while these took a 5-6% hit in 2008-2009, the last two years have seen average salaries steadily climbing back towards their original 2008 figures, and are now only 2.5-3% under those numbers – and still rising – figures that all but guarantee a continued flow of rent paying tenants to this area.
Couple these few tidbits of information with the huge income in rental yield available in some of Fukuoka’s more vibrant and developing areas – as high as 16% p/a in some cases (!) – and you will begin to see why our investment strategy for 2012 makes perfect sense.
Still not convinced? Check out these figures -
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(Map – “Central Asian“)