Weakening Yen Makes Tokyo Investments more Attractive

Hongkongers are returning to the Japanese property market after a two-year absence, taking advantage of a weakening yen, which is at a 20-year low against the US dollar. “Inquiries for Japanese homes from Hongkongers have surged by up to 40 per cent this month,” said Anvy Cheung, chief executive of Sakura Global, which specialises in Japanese property. “In the past two years, most of them just stayed on the sidelines, adopting a wait-and-see approach [due to the pandemic].”

Most of the clients are looking for homes in Japan for investment or for holiday use, with budgets ranging from HK$1.5 million (US$192,000) to HK$2 million, she added. The Japanese yen, which has fallen 12 per cent since January, may continue to weaken against the US dollar amid expectations the Bank of Japan will lag its peers such as the US Federal Reserve in normalising monetary policy. As the Hong Kong dollar is pegged to the US currency, the yen’s steep devaluation makes property investment more attractive to investors from the city. The easing of travel regulations, which were introduced at the start of the pandemic two years ago, has also boosted investors’ confidence.

Polly Lo, a veteran investor in Japan, is now looking for a residential unit for her 28-year-old daughter, who has saved about HK$600,000. Lo reckons it is enough to buy a studio flat of about 200 sq ft in Tokyo or a slightly bigger unit in Osaka. She said that investing in Japanese property was a better option than parking money in Hong Kong banks, where the returns on time deposits do not amount to much. “Besides, Japanese real estate is a better alternative now given the yen’s sharp fall and prospects of annual rental returns of as high as 4 per cent,” Lo said, who owns a shop in Osaka that brings her about HK$8,000 per month. “It is hard for my daughter to buy a flat in Hong Kong with her savings,” Lo said.

Others like her are also looking to use the yen’s depreciation to good effect. Sophie Tsang, a 50-year-old IT professional, plans to make her second investment in Japan. Tsang, who bought her first studio flat in Tokyo for HK$1 million about three years ago, has set her sights on a ryokan, a traditional Japanese inn. She has a budget of about HK$2 million to HK$3 million. “Tourism in Japan will resume once the Covid-19 pandemic is over. I see it as a diversification of my investment, and it provides stable rental income,” said Tsang, who plans to retire next year.

JLL said the number of transactions for Japanese homes conducted by the firm jumped 70 per cent year on year in the first quarter. “The hefty increase was largely due to last year’s low base for comparison,” said Mandy Wong, head of international residential at JLL in Asia-Pacific. Due to the weakness of yen, she said some of her clients were now interested in buying more expensive homes in Tokyo, costing between HK$5 million and HK$20 million.

“They see a weaker yen as a bonus as these luxury homes are cheaper than before,” Wong said.

(Source: South China Morning Post | Pic: Tokyo/ “tokyoform“)

Related Articles

General
Information, News
Many Japanese abodes in 2021 are returning to the roots of traditional residences and adding an earthen floor entryway or incorporating modern variants of the space. Japanese homes already have a small "genkan" entrance area for people to store their shoes before going inside. Now, more apartment buyers are asking for a larger “doma” traditional earthen-floored space, in which they can walk around while wearing footwear and store items for outdoor use. The demand for doma appears to be related to the boom in people engaging in more outdoor leisure activities amid the COVID-19 pandemic and increased consumer desire to maintain cleanliness in the home by separating spaces.
General
Information, News
Abandoned properties have taken the limelight recently for their affordability and countryside location. One couple from Alaska, fascinated by the beauty of traditional Japanese timber work and craftsmanship, had dreamt of using their home-building skills to restore an old, traditional kominka style (large stand-alone) home for a place to settle in for retirement. Ideally, they wanted to find an akiya or abandoned property for no more than about USD$20K, but weren’t sure if their plan was realistic. Given their background, their retirement dream is very much achievable.
General
Information, News
A high-rise hotel with upper levels made of wood has opened in Sapporo, and operator Mitsubishi Estate Co. said most of the lumber used to construct the 11-story building was sourced from Hokkaido.
General
News
On Aug. 25, the first flying car was successfully tested by SkyDrive Inc., a Japanese company that develops urban air mobility solutions, at a Toyota Test Field in Japan, according to a press release on SkyDrive’s website...