Hong Kong’s wealthy looking for regular returns store for Japanese actual property

At Jones Lang LaSalle, inquiries by Hong Kong residents about Japanese properties have jumped as a lot as 70 per cent from final yr, and precise residence gross sales are up about 30 per cent.

Latest high-end listings by worldwide brokers embrace a ¥1.7 billion ($18.2 million) three-bedroom townhouse within the expatriate enclave Hiroo, and a Kengo Kuma-designed penthouse close to Meiji Shrine with an infinity pool and tea home, estimated at greater than ¥5 billion.

Within the extra average worth vary, Japan Hana is providing one- to three-bedroom flats in Tokyo’s waterfront Shibaura district, some with views of Rainbow Bridge and priced from ¥64 million.

Mr Lam mentioned lots of his clients had been looking for second houses in Tokyo and Osaka, in addition to in Kyoto and Fukuoka, cities standard with vacationers and referred to as top-class culinary locations. Some had been additionally taken with ski resorts within the northern prefecture of Hokkaido, he added.

Hong Kong traders are shopping for flats with views over Tokyo’s Rainbow Bridge. 

Whereas some sellers are wooing rich traders with package deal excursions involving helicopter rides and champagne, brokers mentioned most patrons are looking for lower-key offers, with many choosing small and older flats that may be bought in money.

Mandy Wong, head of worldwide residential for Asia-Pacific at Jones Lang LaSalle, described potential patrons as rich people accustomed to investing abroad and shopping for properties primarily for long-term rental returns.

Grace Lau, a financial institution worker in her 30s and dwelling in Hong Kong, is one such investor. Having bought two flats in Fukuoka final yr, she purchased an 18.6 sq. metre studio in June for $HK300,000 ($55,558) after seeing the yen tumble. She mentioned her newest buy was nearly 20 per cent lower than what she beforehand paid for the same room, and that she would possibly purchase extra if the yen saved falling.

“There’s no achieve should you park your cash on the financial institution,” she mentioned. “However with this, I get a 5 per cent yield.”

Sam Wu, a Hong Kong restaurant proprietor in his 40s, mentioned he noticed Japan as a comparatively secure market in contrast with Hong Kong. He and his spouse purchased a store for HK$4 million close to Shinsaibashi, Osaka’s landmark purchasing district, about six months in the past.

“Hong Kong’s property market appears shaky, with so many individuals leaving, so I wished to look elsewhere,” he mentioned, including that they encountered fierce competitors from different bidders. Mr Wu already owned three properties in Japan and visited the nation incessantly earlier than the pandemic, so he felt snug making his newest buy with only a digital inspection utilizing on-line road views.

A bunch of individuals on the rooftop of an residence constructing for a barbecue throughout Japan’s Golden Week. AP

He mentioned rental yields in Japan may exceed 6 per cent whereas in Hong Kong they had been normally not more than 3 per cent. Yields on prime residences in Singapore and London are additionally lower than 3 per cent, in response to Jones Lang LaSalle.

Nevertheless, some level out the dangers for Japan’s market, together with a shrinking native inhabitants and an inclination for the worth of buildings to depreciate rapidly.

Shun Ogishima, a researcher at Sumitomo Mitsui Belief Analysis Institute, additionally mentioned the pandemic had modified individuals’s existence and preferences, developments which can be tough for overseas traders to evaluate.

“We have now seen a shift from the town centre to the suburbs, and better demand for larger properties. It’s tough to learn what demand can be like after Covid,” he mentioned. “It’s dangerous for overseas retail traders who’re unfamiliar with the native space and unable to go to the properties earlier than shopping for.”

Nonetheless, Hong Kongers see alternatives in a housing market that has no particular restrictions on overseas shopping for, or extra taxes for non-residents, even when few of them qualify for Japan’s super-low mortgage charges.

And as soon as border controls are loosened at each ends, brokerages anticipate funding in Japanese actual property to select up much more.

“Japan is so near Hong Kong that if individuals wish to purchase, as a rule they are going to go to,” mentioned Mark Elliott, head of worldwide residential at Savills.


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