great opportunity to attract more people who may eventually invest in Tokyo’s property market,” says Kentaro Sato, director of international residential business at JLL.
For the last six years, residential properties in Tokyo have recorded capital appreciation of 5-6% per year While the metropolis cannot compare to emerging property markets in Southeast Asia – which have seen properties enjoy 10% to 20% capital appreciation per annum over the last few years – properties in Central Tokyo have recorded capital appreciation of about 5% to 6% per annum for the last six years, says Sato.
The Bank of Japan – the country’s central bank – has set itself the open-ended target to increase the inflation rate to 2%, but it has not yet achieved it. Until then, the current financial easing is expected to last and low interest rates for mortgages are likely to continue, says Sato. “Given that the mortgage rates for condominium units are as low as 1.3% for investments, and 0.5% for own stay, the property market in Japan continues to benefit from the current financial environment.