I am trying to figure this out. The United States had a roaring real estate market for the past decade and the Japanese investors have stayed on the sidelines. Now that the market is slowing down or as some think facing the bursting of a housing and real estate bubble, the Japanese are looking at coming back into the United States real estate marketplace.
Does this not make any sense to you? Or on a macro level the Japanese do not see trends very well? This will be another thing to watch going into the future.
“They’re raising the money,” said Dan Fasulo, director of Real Capital Analytics, a real estate investment research firm. “There is money that is focused on the U.S. for the first time in years.”
From 1985 through 1993, Japanese investors went on a U.S. real estate buying binge, pouring $77.3 billion into the United States, according to a 1997 Ernst & Young report.
But when the bottom dropped out of the U.S. real estate market in the early 1990s, Japanese investors lost billions. Mitsubishi Estate Co. Ltd. was caught short on a $1.3 billion mortgage for Rockefeller Center. The property was later put into bankruptcy.
With their own economy faltering at the time, many Japanese investors were forced to move their money back home.
This time, Japanese investors aren’t looking to directly own the real estate and hold large mortgages on their companies’ balance sheets, said Mark Grinis, global real estate partner at Ernst & Young. Instead, Japanese investors are putting money in funds that will own the properties.
“It’s not a lot of groups,” Cushman & Wakefield broker Scott Latham said. “It’s very, very few of them. They’re kicking tires.”
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The Nikkei 225 Index reached an all-time high on Dec 29th, 1989 of 38,957 points before plummeting to 8422 points in May 2003, some 13 years later. On 28th Oct 2008 the Nikkei-225 reached a new 26-year low of 6994.9 points, meaning that the collapse (from the 1989 peak) of the Japanese market has taken 20 years. We can be fairly confident that the Japanese economy, has bottomed, but we cannot ignore the ‘policy paralysis’ that has Japan stagnating for 2 decades. The Japanese government has done very little to reform the economy; instead relying on exports and government spending for stimulus. Now, in the wake of the global collapse, Japanese export markets will dried up.
The positive implication is that the global crisis will force the Japanese government to reform its economy. For this reason there can be few better places to invest than in Japanese property as long as the focus is on the major cities which are experiencing regional population growth.
Since Oct 2008, the Nikkei-225 has recovered to 9,319 points, and its soon to test its previous high around 9,500 points. The yields on Japanese property give similar confidence to the property market, but equities are always a leading indicator.
* [http://foreclosured.blogspot.com/search/label/Japan Analysis of Japanese Property Market]
There is of course a trade off between buying a place that requires a lot of expenditure and effort, and buying a place for a discount that won't attract too many buyers, versus a place convenient for Japanese people. Japan is a great place for DIY refurbishments and repairs. I recommend buying near a Cainz Home branch.
Where do you put your money during uncertain times?
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I am looking for realestate investors that have the funds to buy water front homes with at least 30% equity in them cash investors needed.John 602-904-3443
I have some investments I need to sell ASAP…..Please help me find investors in India, Japan, or China…….payoff on several properties are all we a are asking……HELP…..need quick sales…..thank you….