Who is eligible to buy real estate in Japan?
Anyone can acquire real estate. However it is recommendable to possess a long-term visa (working, spouse, investor...), or even better, a permanent visa. There are two reasons for this:
- It is very difficult to get a loan from a Japanese bank nowadays, even for Japanese people. Needless to say that it is almost impossible without a proper visa and a stable job. However, if you have enough money to buy your property without having to borrow, then the problem is solved. Otherwise proceed to the "how to obtain a loan" section.
- the risk of not to be able to stay in Japan eventhough owning a house or apartment/flat there. Report to the visa section for more information.
How much is it going to cost?
That really depends on the region in which you want to invest. Tokyo is by far the most expensive, but, as a rule, prices decrease progressively as the distance to the center and/or nearest station increases. Besides, old building (30 years old is old by Japanese standard, as houses are constantly rebuilt because of earthquakes or optimization) are substantially cheaper than new ones (less than 5 years). Remote regions like the Tohoku, Hokkaidō or prefectures such as Shimane and Yamaguchi, can be particularily cheap. In some areas where depopulation is a problem, the local government has been seen to offer land for free to people who accepted to settle there for a number of years.
The easiest and most effective way to get an idea of prices is to check nation-wide real estate search engines such as :
Yahoo Japan Real Estate
Goo Real Estate
How to obtain a (house) loan/mortgage in Japan?
In the current economic situation, this has become quite difficult for the Japanese themselves. Needless to say that foreigners in Japan will have an even tougher time. It is vital to have a (Japanese) guarantor, financially apt to repay your loan on your behalf in case you defaulted.
Foreign residents probably have higher chances of getting a loan if they :
- have been living in Japan for some time (a few years) and can speak Japanese.
- they have family in Japan. Being married to a Japanese or having children attending Japanese schools, for instance.
- they have a stable job in Japan, which they are likely to continue for a long period (at least as long as the term of the loan)
- they have a good credit history.
- they have no intention to return to their country before they can pay off their loan (although difficult to prove)
- they have good reasons to want to stay in Japan, are confortable with and well-adapted to Japanese lifestyle, etc.
Instead of banks, it may be easier to obtain a loan at a 住宅金融公庫 ("juutaku kinyuu kouko", i.e. a Public Housing Loan Corporation), which specialise in mortgages. However, their interest rates are a bit higher than banks.
What kind of real estate to choose for an investment?
Japan is a earthquake-prone country. As no region can really be qualified as safe, buying a house or apartment/flat is always risky, as it could be destroyed any time in the future. The safest bet is to buy land, which can be profitable in big cities when rented as parking space. In central Tokyo, a parking space for a single car costs about 50,000 yen/month. There is nevertheless a serious drawback to any form of investment in big Japanese cities especially. Since the the burst of the financial bubble in 1990-91, real estate prices have plummeted by 50% for residential and 80% for commercial land in Tokyo and Osaka. Even though there is a chance that prices may once again increase in future, it is still risky to invest in real estate in Japan.