Japan's luxury real estate market is changing, attracting the attention of rich investors all over the world. The country has always been a beautiful place with amazing landscapes, culture, tasty food, and history. But what many people don't know is that Japan offers great value, especially when compared to other Asian countries.
The secret to this is Japan's exchange rate. As of October 25, one Japanese yen is worth only US$0.0067, and it hasn't gone much higher than US$0.10 in the past three years. This is good news for smart investors because it means you can get more for your money, even when looking at luxury properties. According to Knight Frank's 2023 wealth report, if you have one million dollars to invest, you can buy a generous 60 square meters (about 636 square feet) of prime property in Tokyo. This is almost double what you'd get in New York or Singapore and nearly triple what you'd get in Hong Kong.
The luxury real estate market in Japan is changing too. In the past, most Japanese people preferred simple homes, but now there is a growing demand for "ultra-luxury" homes. Savills, a real estate company, says that these high-end homes are now priced reasonably. They usually cost only two to three times more than regular homes on a per tsubo basis, which is about 35.58 square feet. This shift is making the luxury property market in Japan look different. Foreign rich people, many of whom are buying second homes in Tokyo, are leading this change. Because of this, prices are going up. The average price of a new apartment in central Tokyo went to a record high of 129.6 million yen (around US$863,000) between January and June, according to Japan's Real Estate Economic Institute. But it's important to know that this number went up because of a few very expensive apartments.
f you're a rich buyer looking for luxury, Japan's real estate market has a lot of great options. Most of them are new buildings, and there is much more demand for real luxury homes than for homes that are already there. As Michael Chen, who is the CEO of the H2 Group in Hokkaido, says, "If it's a true luxury product, it can go quickly." This shows that luxury properties are in high demand.