CONCIERIA, the property brand of CLEARTH LIFE in Tokyo

CLERATH LIFE TAIWAN INC. (東京都心不動産股分有限公司), one of CLEARTH LIFE Group companies, and the director Mr. Jimmy Huang (黄逸群) appeared on Taiwan's TV show “今日新聞 (NOWnews)” on November 22 (Fri), 2024.

Contents: Is Now a Great Opportunity to Purchase Properties in Japan?

Property prices in Taiwan are reaching record highs, making them unaffordable and sparking interest in overseas investments once again. With the JPY weaker than before, property prices in Japan are now at their lowest in decades. Many are wondering: "Is this the right time to buy property in Japan? What should we know before buying?"

 

■ The host's question:

"I heard that a certain celebrity bought a property in Tokyo for about NTD 15M but later lost around NTD 1.5M due to the weaker JPY. I've also heard of cases where people faced losses after buying property in Hokkaido. Is it really a loss to buy property in Japan?"

□ Mr. Lee Chi-Yuen (李奇嶽), the chairman of the Japan-Taiwan Exchange Association, answered:

"While earning rental income from property in Japan is relatively easy, it does come with exchange rate risks. I first bought property in Japan in 2009, when the exchange rate was USD 1 = JPY 85. Currently, it is USD 1 = JPY 150. At first glance, this might seem like a loss, but you can avoid exchange rate risks by taking out a mortgage. If you borrow and repay in JPY, there is no issue. Unlike Southeast Asia or China, property in Japan doesn’t see sudden value increases, but it is stable and suitable for long-term investment. In some cases, property investment may support obtaining an investment or work visa.”

 

■ The host's question:

“What is the most suitable area to buy property?”

□ Mr. Jimmy Huang, the director of CLERATH LIFE TAIWAN INC. answered:

"Japan's land area is about 10 times that of Taiwan, but not all areas are suitable for investment. I recommend central Tokyo. In Tokyo, development and population are concentrated in the central areas. For foreigners, the five central wards of Tokyo are particularly suitable, offering a stable investment return yield of around 3%."

 

■ The host's question:

The JPY continues to weaken in 2024, but will it weaken even further? Also, what do you project will happen to property prices?"

□ Mr. Jimmy Huang answered:

"Large-scale redevelopment is underway, centered around major areas of Tokyo. Urban development integrates public transportation and commercial facilities, naturally attracting people to the area. The trend of population concentration in large cities continues, and despite the low exchange rate in recent years, economic growth is progressing due to redevelopment. Many investors have achieved capital gains during this time."

 

■ The host's question:

“Aside from Tokyo, are Osaka, Hokkaido, and Kumamoto, which has been gaining attention recently, suitable for investment?”

□  Mr. Lee Chi-Yuen answered:

"Speaking of other regions, Hokkaido, for example, offers high rental yields ranging from 8-10%. However, maintenance costs can be quite high, and there is a risk of difficulty in finding tenants. In rural areas especially, vacancy periods can be lengthy, during which management fees and taxes still need to be paid. Osaka, as Japan's second-largest economic hub, is a recommended option, but it’s important to carefully choose the right location. Additionally, land prices in Kumamoto have increased six-fold over the past two years, making it an increasingly attractive investment destination."

 

■ The host's question:

“There seem to be some very cheap properties in Japan, but what about buying one of those?"

□ Mr. Jimmy Huang answered:

"I don't encourage it. The population in rural areas has been declining, making it difficult to find tenants. Older properties also tend to be much more expensive to maintain, with the costs of interior renovations and repairs often exceeding a few months' rental income."

 

■ The host's question:

"Will older properties in Japan lose value?"

□ Mr. Jimmy Huang answered:

"In Taiwan, rising land prices due to inflation tend to offset the decrease in value caused by building deterioration over time. In Japan, the legal durable lifespan of reinforced concrete (RC) buildings is 47 years, and for wooden buildings, it is 22 years. Inflation is also occurring in Japan, and land prices have been rising. For example, land prices in Kumamoto have increased by 30% over the past two years. Although buildings lose value due to depreciation, this is often exceeded by rising land prices, resulting in an overall increase in property values."

 

[Summary]

Choosing the right location is crucial.
It’s important to consider not only the purchase price but also the property’s potential to attract future tenants or secondary buyers. Partnering with a reliable agent and gathering sufficient information is essential.