High rental yields from Japanese properties
One of the strongest draw cards for investing in Japanese property markets is the high rental yields that are possible from many properties. Upwards of 5%+ is common and in some properties it’s possible to get above 10%
In the past finding properties that have a high rental return and capital growth has been pretty much non-existent, however, according to the Real Estate Economic Institute, the average price of a condominium in Japan in 2015 was ¥46.18 million, which is 7.2 percent higher than it was in 2014. Over the past three years, spurred by material and labor shortages, the price of condos have increased by almost 20 percent, the steepest rise ever.
PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI) rank Japan as number one in Asia in 2016 for its prospects for residential property investment returns, the same as for 2015. Tokyo ranked number 1 and Osaka, number 4. Rental yields typically are around 5% possibly higher. Currently the market has more buyers than available assets. Many of these properties under-priced assets.