Land of the Setting Value

[Patosan]

Latest propertery price trend data for Japan was released today.
For the 12th consecutive year it's declining !

I've been in Japan 5 years and as far as I remember every year the trend is 5% down, well this year it was 5.8%.

I view it pretty similar to the Japanese stock market and business .. oops I mean politics here. They are STILL too scared to bite the bullet, let the fallout come and the strong survive, then rebiuld. It's all about trying to avoid the inevitable ... which only drags it out and probably deepens the final bottom abeiit delays it.

I've heard that the yield for apartments in Osaka are at 10%.
But with the gain being actually negative it's still a bit dicey for my money. It's bit of a sobering thought for those who are always overly optermistic about prices always going up.

God knows where to call the bottom !
(actually she probably doesn't know)

 

[sctpc]

out of intrest could you tell us the value of an apartment over there in australian dollars approx melbourne is about 300k - 500k depending on size but private apartments can be well over 2 mill

and the rental return is about 4% with a 6% intrest rate

 

[Patosan]

The price of the apartments are not so different from that of Melbourne. Of course all the usual factors will give a spread of prices.

Though :
Mortgage rates are around 2%. Have been for some time, with no rise on the horizon.
For that money you're buying a shoebox.
They're not built to last.
Apartments and houses here depreciate at a huge rate. I mean the market value not accounting book value. I don't have figures.

 

[sctpc]

so from living over there for 5 years and seeing units drop so much in value would you say that australia could have the same problem down the track with over priced property or would you say it is due to the jap goverments policesw and not over supply of units

 

[Kevmeister]

I think it was a friend saying the Japanese don't tend to like much that is old, including apartments. I think he mentioned oldish (20 years) apartments often being demolished and something better rebuilt? Is that true? Would explain the rapid (rabid) depreciation.

 

[Patosan]

Let's just say that at least with houses they are not built to last.
My brother in law works in the housing const. industry and says that he wouldn't buy most of what's being put up.

I would say that most of a house's value is gone after 10 years, then it's just land content.

True the Japanese don't like anything old.
Though with the recent recession that is changing a little.
However no-one would think to buy an pre-owned house to actually live in. They'd knock it down.

I on't think it could happen in Oz for many reasons, some above and the fact that the property bubble that burst in 1990 went far further than anything we in Oz could conceive. It makes our recent "bubble" look like market noise only.
But then I haven't studied this, it's merely my own very humble opinion.

Always Learning who is based in the richer Tokyo area and I suspect may have studied this topic much more than me may have some insights.