Newsletter
December 2004
For renters - no key money
See the bottom of this newsletter for some apartments available for rent with zero key money.
For buyers. Has the market hit bottom?
It is notoriously difficult to call the bottom of any market, so we are not even going to try. But for anyone who is trying to time the market to buy an apartment in Japan there are a few trends worth noting.
Firstly, according to recent articles in the press, the period of deflation in Japan is coming to end and we are entering a period of modest inflation. Eventually this will find its way into the property market and property values will begin to rise.
Secondly apartment values have fallen further than rents, so rental yields have increased. As prices have fallen, buy-to-let has become more and more attractive. Gross yields of 10% are not unusual. As prices fall, yields will rise and more investors will be tempted to enter the buy-to-let market, increasing the demand for property.
Thirdly, while it is difficult to time the bottom of any market, one thing we can say for sure is - this isn't the peak of the market. The last peak was late 80s early 90s and prices have fallen for a staggering 12 years or more. At some point there will be a cyclical recovery.
Finally there is the issue of expectation of price increases. We believe a recovery in the market will occur when customers believe that property will be more expensive next year than this. When this sentiment prevails there will be every incentive to buy sooner rather than later. Nobody wants to be left out of a rising market.
It is difficult to time the market, but anyone who has followed the property markets in the UK , USA or Australia will know how lucky those people are who bought during the trough of the mid 90s. Many people bought homes then that would be completely out of their reach at today’s prices.
No Key Money
Turning to a different subject, below is a list of rental mansions with no key money:
<Rokko>
105,000 yen/month No key money Two months refundable deposit
60 m2 3LDK Semi-furnished. Next to mountainside.
5 minutes walk from bus stop. 10 minutes by bus from Hankyu Rokko Station
South facing with fantastic view of sea, mountain and city.
<Okamoto>
90,000 yen/month No key money Two months refundable deposit
About 30 m2 2K
5 minutes walk from Hankyu Okamoto station
Great mountain view with large balcony.
<Ashiya>
60,000 yen/month No key money Two months refundable deposit
About 14 m2 Studio
10 minutes walk from Hankyu Ashiyagawa station
We will be taking a short new years break, so the newsletter for January will be later than usual.