With Japan's residential property index for March rising by 1.5 percent compared to last year's figures, with condominium prices in the capital city rising by 8.9 percent, there appears to be nothing that can hold back the growth of the Japanese property market.
According to a report from cnbc.com, property prices continue to increase. Deutsche Bank, in a note to its investors for June, cited data indicating that prices of condominiums in Tokyo costs more than nine times the Japanese annual household income. The bank said, "It has become difficult for general households to keep up with rising housing prices while employment and income are stagnating."
It added, "In demographic terms, we expect the nationwide housing demand to remain weak." The note further cited that there has been a steady decline of the population in the 25 to 44 year old bracket.
Another major factor for the heating up of the Japanese property market is the influx of Chinese real estate buyers that have been lapping up homes resulting in higher market prices. Due to the increased Chinese purchasing in the market, Tokyo's apartment prices have reached their highest levels since 1990's. As reported on smh.com.au, the Japanese Real Estate Economic Institute said that the increase has been 11 percent over the past couple of years.
As observed by SouFun Holdings agent Zhou Yinan, who is based in Osaka and represents the Chinese brokerage firm, "The demand is like water exploding up from a well. The Chinese buyers had mainly been from Taiwan until last year, but that trend reversed since October as the yen weakened against the yuan."
Another broker, Song Zhiyan of BestOne realty based in Ikebukuro, exclaimed, "There are so many Chinese buyers recently. I only work with clients who can pay cash. Why waste everyone's time?" Their methodology includes using the free messaging app WeChat to reach potential buyers throughout China and then make arrangements to fly them to Japan to see the properties. Her portfolio is booming, as her transaction volume has tripled in the last six months.
Others don't even engage the services of a broker, as they go to real estate agencies that are located in the Ikebukuro Chinatown District in Tokyo. Listings of properties for sale are piled up right outside a Chinese supermarket in the area.
