This past March (2015), the major land value index, “declared value,” was officially announced. This value, which is the price of specific land on January 1st each year, is not only used in real estate deals, but also to calculate inheritance/fixed property taxes and to conduct real-estate and accounting appraisals.
Public data shows a clear rise in the prices of Tokyo properties. According to 2015's declared value (as of Jan 1st 2015), the average prices within the commercial districts of Tokyo's special wards increased 3.4% year-on-year, greater than the previous year's 2.7% climb. Increases were most prominent in the city centers of Chiyoda-ward (5.7%), Minato-ward (5.6%), and Chuo-ward (7.2%). Also increase in wards surrounding the city centers like Shinagawa-ward (4.3%), Shinjuku-ward (4%) is a sign that the price appreciation is spreading.
The top commercial spots were “4 Ginza Chuo-ward”, “2 Marunouchi Chiyoda-ward” and “5 Ginza Chuo-ward” respectively – “4 Ginza Chuo-ward” was 33,800,000 yen/square meter, a 14.2% jump in just one year.
Office, commercial and residential needs are reflected in the market through high trades, with some concerns of a potential bubble economy. However, world property market prices have continued to rise, despite the dramatic impact felt by the collapse of Lehman Brothers.
According to The Japan Association of Real Estate Appraisers' Dec 2013 “World Property Price Report,” of New York, Paris, London, Frankfurt, San Francisco and Tokyo, Tokyo was surprisingly the only city where condominium prices decreased from 2000 to 2013 (not as a whole but on specific land). This is all the more remarkable given that price levels for many other cities doubled within the same period of time. Looking at the Asian market, condominium prices in major cities, such as Hong Kong, Singapore and Taipei have all bounded upwards. Therefore, while we have stated that Tokyo properties have begun their ascent, this climb is still at a very low level, indicating that the appreciation has just begun.
Tokyo property prices have not risen since 2000. With positive elements such as depreciation of the Yen, the 2020 Olympics and the opening of mag-lev (high speed rail) lines, foreign investors have begun to realize that Japan's property market can be a good bargain. Highly liquid and easy to make purchases, Tokyo condominiums are a great investment. Now is a great time to invest in Japan.
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Each of us investment team members are expert professionals at property investment advisory, with an acquired know-how of Japanese property investment. We are more than happy to support you by helping you develop your ideas about the properties in the pursuit of your goals. Also, our multinational team welcomes any inquires in English and can provide additional support for speakers of Mandarin and Bahasa Melayu.