Australians are taking advantage of Japan’s cheaper property market in droves, with ski towns becoming increasingly popular for investment.
Experts say the lower entry price for Japanese property compared with Sydney and Melbourne is an attractive proposition for young Australians priced out of domestic markets.
Sydney wharfie Jake Heath’s first entry into real estate was in Japan about 10 years ago, after he worked at Niseko ski resort, about 90 kilometres from Sapporo.
“I got to the end of my job over there and I was just about to move back to Sydney and the opportunity came up,” Mr Heath, 33, said. “I spoke to my dad told him about the opportunity and it wasn’t too expensive,” Mr Heath said. “He said if you think it’s a good idea, I’ll lend you a bit of money to get it together.”
Mr Heath’s goal was to build a small house to use as a base for skiing holidays, but he had a difficult time pulling together capital because of tight Australian and Japanese lending requirements.
“It’s only been in the last six months I’ve been in the position to finance building something on it myself,” Mr Heath said. “I’m midway through the application process, I’ve done all the planning. We’re just waiting on the snow to melt so we can work.
“It’s taken a long time … over 10 years of almost giving up. Thinking maybe it was just a silly idea in the beginning, maybe I was just kidding myself that I could ever pull it together and get it to work.”
Mr Heath has seen a huge wave of Australian investment in Niseko.
“[Australians] were buying established apartments and townhouses and condos and that sort of thing, it was changing the town significantly,” he said. “There are two or three groups of young people similar to me doing the same thing.”
In Hakuba, another ski town about 275 kilometres west of Tokyo, the asking price for a seven-bedroom home was $433,578. In Thredbo, it’s $240,000 for a studio apartment.
For Fukuoka-based Ziv Magen, whose Nippon Tradings International company has a customer base that’s 40 per cent Australian, Japan’s downward economy has made it attractive to investors.
“Australians are always open to investing overseas because the markets are difficult to enter, affordability wise,” he said. “If you’re buying in Melbourne or Sydney you’re lucky to get 3 or 4 per cent yield.”
Mr Magen said the Japanese government also had no regulations or restrictions on foreigners buying or owning land in the country.
Wire transfer company OFX has seen an 80 per cent increase in cash transferred by Australians aged under 35 for property investment from 2015 to the end of 2017. More than half of its total business to and from Japan is for property investment.
OFX corporate dealings head Michael Judge said young Australians who loved Japan were happy to take the plunge because it was more affordable compared to home.
“When assets become inflated and expensive, the question becomes: “Where can I make money?’” he said. “[Investing overseas] is to drive wealth creation so they can come back to base camp in the hope they can deploy their capital locally in the Australian market.”