2020 Olympics shines spotlight on Tokyo’s property market

/ EdgeProp
April 26, 2019 11:48 AM SGT
As Tokyo prepares to showcase itself to the world during the Olympic Games next year, the government is capitalising on the global spotlight to boost foreign investments in the economy. “International investors often invest in the cities that they like and are familiar with, so this global event is a great opportunity to attract more people who may eventually invest in Tokyo’s property market,” says Kentaro Sato, director of international residential business (Japan) at JLL.
Regina Lim, head of research for Southeast Asia at JLL Singapore, adds that new legislation has been drawn up to attract more foreign investments and skilled foreign workers into the country. Other incentives include lowering corporate taxes, easing visa requirements, and providing foreign employees with more language support while they are in Japan.
For the last six years, residential properties in Tokyo have recorded capital appreciation of 5-6% per year
This complements urban rejuvenation plans for the metropolis. Lim says: “The urban populations in Tokyo and Osaka are increasing every year, and the government has come up with initiatives to rejuvenate these two cities. Close to US$28 billion ($37.89 billion) has been invested to achieve this.”
Capital growth
Tokyo is considered to be a relatively safe investment haven, and one of the most stable investment destinations due to its relatively stable political situation and attractive currency exchange rates.
While the metropolis cannot compare to emerging property markets in Southeast Asia – which have seen properties enjoy 10% to 20% capital appreciation per annum over the last few years – properties in Central Tokyo have recorded capital appreciation of about 5% to 6% per annum for the last six years, says Sato.
“As the population is still increasing in Central Tokyo, so too will property prices continue to climb, as long as the overall economy grows,” he adds.
This year, the total real estate investments for the whole of Japan are forecast to...