Jan 2019

Increased Immigration into Japan

Property prices in Japan should increase in the coming years because of the rising immigration in Japan.

Japan has had a history of being isolated. Aside from being geographically difficult to reach, for much of its early history, the country for the most part remained closed to foreign influence. Between 1641 to 1853, Japan barred its nationals from leaving and foreigners from entering. Only traders from China and the Netherlands were allowed at the port of Nagasaki on Japan’s southernmost island of Kyushu.

This isolation, strict immigration laws and a declining birth rate has now led Japan to be  referred to as a “super-aged” nation, where more than 20% of the population is over 65. By 2060, the country’s population is expected to plummet by more than 40 million from 2010, to 86.74 million people, according to a projection by the Japanese Health Ministry (Green, 2017) . With fewer workers paying taxes to support a growing older population in need of pensions and healthcare services, Japan’s economy is facing an unprecedented challenge and massive labour shortage.  

One of the major ways Japan may be able to ease it’s labor shortage especially in so-called undesirable vocations such as demolition and construction is to increase immigration of foreign nationals. Currently Foreign nationals make up just 1.6% of the country’s overall population. (CNN 2018). Just in the last 5 years immigration has doubled and looks to continue to increase. (Nikkei Asian Review 2018)

In most countries an increase in immigration has led to positive effects on property. These effects include increase in property prices, an increase in the demand of both owner occupy, increases in the number of tenants, and rental properties and also an increase in rental prices.  Naturally many Immigrants are likely to choose rentable properties over owner-occupy. With the increase in immigration in Japan there is an expectation that property prices and rental costs will increase also.