In the pink
What’s not to like about waterfalls, cherry blossom reflected in glittering skyscrapers and a booming property market? Japan is in the limelight– and not just because of the Olympics, says
What’s not to like about waterfalls, cherry blossom, glittering skyscrapers and a booming property market? Japan is in the limelight, according to Carla Passino
Earlier this year, six million children flocked to polling stations across Japan. after pondering the merits of edgy superheroes over traditional fairy-tale characters, they cast their vote for the country’s new Olympic mascots. Olympic fever isn’t just gripping Japan—where initiatives range from the mascot vote to an ambitious bid to fashion medals out of recycled mobile phones—it’s also spurring international buyers to invest in Japanese property. as Tetsuya Kaneco of Savills Japan succinctly puts it, ‘the market is hot, but not over-heated’.
‘Japan has once again become the focus for investors and visitors from all over the world, because of the 2020 Olympics in Tokyo and the 2019 rugby World Cup,’ says Sonny Saito of Japan Capital realty, an affiliate of Christie’s international real estate. Some investors, adds Yukiko Takano of list Sotheby’s international realty, have bought properties to have an Olympic base, but, in the meantime, are taking advantage of excellent rental returns.
That’s perhaps the real secret behind Japan’s burgeoning appeal: beyond the Olympic frenzy, you can count on strong fundamentals. The robust rental market, which seems immune to shocks such as the global financial crisis, is obviously one of them, but Mr Kaneco also quotes the low cost of capital and a stable political climate as major attractions. above all, ‘the largest forces behind [Japan’s] strong market are a solid economy and an acute workforce shortage’.
in November 2017, for example, a resale apartment spanning about 743sq ft in Tokyo cost an average of JPY53 million (about £343,000) and a new-build fetched JPY62 million (just over £400,000).
‘The hottest market at the moment,’ says Miss Takano, is central Tokyo,
a vast, vibrant area that combines fashionable shops, restaurants and skyscrapers with ancient temples, cherry-tree-studded gardens and the Imperial Palace. She also names Niseko Village, a ski, spa and golf resort at the foot of a snow-capped, dormant volcano on Hokkaido, Japan’s northernmost prefecture, as a location to watch. ‘Land prices have skyrocketed in the past five years. The quality of the powder snow is very high and it’s a top choice for tourists.’
Two more hotspots are, according to Mr Saito, Karuizawa, an elegant mountain resort about two hours from Tokyo, where crystalline ponds, waterfalls and woods thick with birch and larch provide the perfect backdrop to summer walks and winter skiing, and Kyoto, Japan’s former capital, with its serene gardens, Buddhist temples and hundreds of cherry trees stretching blossom-laden branches over paths, rivers and canals.
The launch of the Four Seasons Hotel Residences about 18 months ago has made Kyoto especially appealing to buyers looking for serviced apartments that can be easily let out for part of the year. ‘[The city] is booming,’ says Mr Saito. ‘As we get closer to 2020, Tokyo may see a little slowdown, but Kyoto will be still increasing in price well beyond 2020.’
An upbeat Miss Takano sees sales becoming even stronger, as Japan stands to benefit from the increasing number of wealthy millennials and growing international interest in its extraordinary culture. It’s a view that resonates with Mr Saito. ‘Many of the affluent buyers looking for a Japanese garden in Kyoto or an architect-designed mountain home in Karuizawa are not doing so only for monetary reasons—they’re doing it to have a piece of the Japanese spirit.’