A real estate crash 2020!

The Tokyo Olympics were decided at the 125th IOC General Assembly held on September 7, 2013 in Buenos Aires, the capital of Argentina. Since then, the price of land in Tokyo's 23 wards has risen, and in Minato Ward, it has risen substantially, rising by 5 to 7% every year.

Then, will the price of land in Tokyo continue to rise as it is?

Japan's real estate prices cannot be expected to grow significantly after the Olympics

From the conclusion,

Japan's real estate prices are not expected to grow significantly after the Olympics..

New apartment contract rate49.41 TP1T, to the same level as immediately after the real estate bubble burst

From 2018, the first month contract rate for new condominiums in Tokyo will continue to decline. According to a report by the Real Estate Economic Institute, the contract rate in December 2018 was 49.4%, which was below 50% since August 1991 (49.7%), which was right after the collapse of the real estate bubble.

The level was 72.5% in December 2017, but fell to 63% in April 2018, 53.9% in November 2018, and 49.4% in December, finally falling below 50%. As a result, we have come up with the problem of "accumulating newly completed stock" that we often hear in recent news.

Source: Institute of Real Estate Economics

https://www.fudousankeizai.co.jp/mansion

A fundamental problem in which real estate prices in Japan cannot rise

Recent data suggests that prices will peak in 2020. So why can't we expect real estate prices to rise after 2020? This is because there are three major problems Japan faces.

Problems with real estate in Japan

(1) A new apartment building will be built to prevent inheritance.

Under Japanese inheritance tax law, inheritance tax is calculated by multiplying the inherited property by the inheritance tax rate, so lowering the valuation value of the inherited property will lead to tax savings.

For example, if you have a cash deposit of 200 million yen, the inheritance valuation will be 200 million yen assuming 100% of the assets. If you purchase an apartment worth 70 million yen and a site worth 100 million yen for 200 million yen, the inheritance assessment will be about 100 million yen.

In other words, it's more taxier to buy an apartment than to own in cash.

In addition, each financial institution will proactively accept apartment loans if they take out some cash, and interest rates are low, which will eventually lead to an increase in apartments and rented houses.

② The real estate inherited from the baby boom generation is disposed of.

The vacancy rate is expected to rise throughout Japan, including in Tokyo.

Problems with real estate inherited from baby boomersWill be.

The baby boomer generation is now around 70 years old and had 2.5 million grades in the first grade, but now there are not 1 million. In 2025, the baby boom generation will become the elderly of the latter half, and the inherited unnecessary real estate will enter the market, facing the problems of rising vacancy rates and falling real estate prices.

According to a report by Nomura Research Institute, the vacancy rate of 21.1% in 2023, 25.7% in 2028, and 30.4% in 2033 (21.66 million vacant houses) is announced.

One out of three rooms will be vacant in 2033In our environment, we lower rents regardless of which real estate owner renters. As real estate prices are determined based on rent, real estate prices will naturally fall.

③ In 2022, the green areas will be sold and a lot of real estate will be supplied to the market.

What is a production green space?

For land with high fixed asset value such as in Tokyo, tax payment is suppressed as if the value of fixed asset is zero when operating agriculture. The system was started in 1991 and the certified green spaces are valid for 30 years.

That is,From 2022 onwards, the release of green spaces will begin.

Recent Government Policy

In response to this issue, the government enforced the amended Green Space Law in June 2017.

[If released all at once in 2022, the real estate price will fall sharply, so it will gradually become a residential land]It became the direction of. You can continue to specify every 10 years, but the conditions are

The owner is actually doing the farming.

The average age of farmers is already66.6 yearsis.

How many people can continue as farmers?

Quote: Ministry of Agriculture, Forestry and Fisheries

http://www.maff.go.jp/j/tokei/sihyo/data/08.html

Summary

I have explained various risks of real estate investment in Japan.

Newly built apartments, lots of inherited real estate, problems with green spaces, none of them are easy to solve. All of these are structural problems in Japan. You no longer need to stick to Japan.

What are the future investment destinations?

Focusing on the world and Asia, it is a good investment environment as opposed to Japan.

Focusing on population growth, the rate of population growth around the capital city of Manila in the Philippines is the highest in Asia. In terms of real estate price, Cambodia and Phnom Penh are very attractive, even for high-end condominiums from several million yen. In the next column, we will introduce Malaysia, which has been selected as the top Japanese migration destination for five consecutive years, and Hong Kong and Singapore, which maintain high wealth, and their characteristics.

Property prices in Ho Chi Minh City are rising sharply with metro development.

Predictions are that the metro will begin operating in 2021-2022.

Compared to other countries, it is judged that the situation is good for buying real estate.

Click here for Ho Chi Minh real estate sales property list

 

Investment in Vietnam is Ho Chi Minh Suzuki Real Estate

We support rental and purchase of condominiums, offices and investment real estate, mainly in Ho Chi Minh, Vietnam.

Our strength is to provide buyers with accurate and accurate information in a timely manner.

This website introduces the latest news articles on real estate, economy, travel, and events related to Vietnam.
Based on my experience as a consultant in Hong Kong, the article also introduces real estate, management, accounting, tax, and labor affairs.
If you like, please take a look.