Newsletter
July 2005
Welcome to ffeilden
Property in Kobe, Japan
To those of you receiving this e-mail for the first time, welcome to the ffeilden newsletter, a newsletter for English speakers looking to buy or rent property in Kobe, Ashiya and Nishinomiya in Japan.
See our website: www.ffeilden.com
The Outside World.
We are just back from our annual vacation to the UK, where the conversation topic is still the property market. The contrast between the Japanese property market and the UK property market could not be greater. Property values in the UK are near all time highs while Japanese property values are at 14-year lows. According to figures in June’s Economist, since 1997 prices have increased in Britain by 154% and decreased in Japan by 28%. In fact, Japan and Germany are the only two major countries where prices have fallen. In most of the developed world; in Britain, Ireland, Australia, Spain, a housing boom has become a housing bubble.
We thought it would be interesting to compare prices in Kobe with Manchester, UK. Manchester is a former manufacturing city, similar in size to Kobe, and like Kobe, distant from the capital city. Importantly, the income per head in Japan and the UK is now similar, so you might expect the prices of typical properties to be similar.
This is what we found. A typical residence in the suburbs of Manchester is a terraced house (row house) with a garden front and back with two bedrooms, maybe three. The typical residence in Kobe is a 2 or 3LDK apartment with a balcony. The typical Kobe property is smaller and newer than its counterpart in Manchester, and in Manchester, the location is a more important factor. Neither properties are likely to have a parking space. The income rent potential is very similar, about 80,000 to 100,000 yen per month. A typical residence in Whitefield, a suburb of Manchester would set you back about 135,000 pounds, that is 25m yen. A typical residence in Rokko, providing it is not new, costs 12m to 15m yen.
What does this comparison tell us? An average residence in Manchester costs double its counterpart in Kobe, and it is bigger, with more outdoor space. The key determinant of value in Kobe is the age of the property, in Manchester it is the location. For buy-to-let investors, yields are higher in Kobe, and Manchester investors are unlikely to see a repeat of the capital gains they have enjoyed recently.
It isn’t long ago since property in Kobe was more expensive than in London. Now it is half the price of Manchester. Many optimists in the UK argue that high prices are sustainable because interest rates are likely to stay low. They would do well to take note of Japan where years of near 0% interest rates have not stopped prices from falling. In contrast, Kobe residents should note that was happened in other countries. Once prices start to rise, the expectation of ever higher future prices and capital gains pushes values beyond where common sense should take them.
For Sale in Kobe
We have added a new section to our website. Now you can check the Properties for Sale page on our website to see listings and photos of selected properties for sale in Kobe. Check the website regularly for new property.
http://www.ffeilden.com/listing/
This of course is just a selection of what is available. We have access to all the properties registered for sale on the real estate agents network. And as always, you can request a search via our online application form