Real Estate in Japan

Land properties are a great part of the Japanese economy as lands are always used as collaterals for loans. Collateral is an asset you offer to the bank or other financial institutions to secure that the loan is authentic. The lender can take ownership of the collateral asset, if you do not repay the loan. Since Japanese small businesses have few opportunities for equity finance, they use the land as collateral to obtain loans. This is a great investment for the banks and other financial institutions as well because land does not depreciate.

The Japanese value their real estate so much; it is a precious asset that not everyone can attain in Japan due to the high price range. However, most Japanese still try to purchase their own real estate by obtaining loans and use these properties for residence or as investment (i.e. apartment rental). This is why there is always a high demand for real estate in Japan, especially in the urban areas because most Japanese always try to avoid heavy traffic, rush hours, and expensive parking fee.

Almost anyone can obtain real estate properties in Japan, especially if you already have a long-term or permanent visa. If you need to apply for a loan, however, you would also need to show stable financial status, meaning having a stable job and being able to pay all your bills.

A great tip when buying real estate in Japan is to research on the legal matters ahead of time. Since lands are sometimes used as collateral, there is no harm in checking in the registry if there are any mortgages, liens, or other personal rights attached to the land. Also, there are some lands that are restricted to building and construction. More information about this can be found in the Urbanization Planning Act of Japan.

Another advice is to check out court auctions. Since there is a pretty high demand real estate in Japan, prices are usually sky-rocketing. Not to mention that you still have to go through brokers, dealers, or land developers in order to purchase properties in Japan, so this adds to the expense. A better and cheaper way of acquiring real estate in Japan, therefore, is through court auctions. Most Japanese newspapers publish lists of all properties and their locations that are being auctioned by the court for the month. You may want to check out these properties (however, one cannot just go inside these properties, they must be observed by a distance). Then, you have to bid for these properties in the court. You may have to compete with professionals who are looking to buy and resell these properties to gain income, but it’s a fair shot. And the reward, being able to purchase a real estate in Japan at a greatly reduced price, is definitely worth it.