Did you know that during the coronavirus pandemic, real estate investment in Tokyo ranked first in the world in the January-September period of 2020?According to a survey by Jones Lang LaSalle (JLL), a major real estate services company, the amount of commercial real estate investment in the Tokyo area from January to September 1 was $9 billion (approximately 2020 trillion yen), the world's largest investment amount, ranking fourth compared to the same period last year. It has made great progress since then, and is expected to remain strong in 1 as well.Especially if you are new to real estate investing, starting in a booming area can be a key to success.This time, I would like to talk from the perspective of Tokyo if you want to start investing in real estate.
Top cities for real estate investment amount
The table below is based on JLL documentation.Tokyo, which was in 4th place last year, has moved up to the top.Due to the impact of the coronavirus, the number of unemployed people in the non-agricultural sector in the US employment statistics was 2020% in March 3, but in April it was 4.4%, which exceeded 4% in October 2009 immediately after the Lehman shock. It reached %.Due to the effects of the lockdown, New York's economy deteriorated rapidly, and rents fell significantly.
reference:Rental real estate portal ZUMPER September 2020 report
| Ranking | January to September 2020 | January to September 2019 |
| 1 bit | Tokyo | ニ ュ ー ヨ ー ク |
| 2 bit | Seoul | Paris |
| 3 bit | UK | Seoul |
| 4 bit | Paris | Tokyo |
| 5 bit | ニ ュ ー ヨ ー ク | Los Angeles |
Compared to Europe and the United States, rental demand is increasing in Japan due to the fact that the coronavirus death rate tends to be lower, the economy is relatively stable due to factors such as the government's anti-coronavirus measures, people are spending more time at home, and the use of e-commerce sites is increasing. was stable, and yields did not fall significantly.You might think that travel restrictions will slow the movement of foreign investors, but by using a web camera for previews and reviews, this hurdle can be lowered, making it possible to purchase Japanese real estate even if you are in a rural area or overseas. state.
Why Tokyo is the best place for real estate investment in Japan
Due to the coronavirus, the momentum for rural migration is increasing in Japan, and according to the "July Population Migration Report" released by the Ministry of Internal Affairs and Communications, people are moving from the Tokyo area (Saitama, Chiba, Tokyo, Kanagawa) to other prefectures for the first time in 7 years. It was also announced that there were 24 more people than transfers.However, I feel that the economic trend that has been built over many years does not seem to be enough to disrupt the structure of urban concentration.Therefore, it is highly likely that the inflow will increase in the same way once the corona virus subsides.
Tokyo is attracting attention from overseas investors, and the occupancy rate is probably high. The occupancy rate of properties for singles in Tokyo, announced in June 2020 as part of the "6th National Rental Housing Survey", was 8% (vacancy rate 98.47%), which is the lowest vacancy rate in the country. is.
Also, from the perspective of NOI rate (profit rate), the top five NOI rates for properties for singles are Hokkaido 5%, Miyagi Prefecture 78.60%, Saitama Prefecture 74.76%, Chiba Prefecture 71.12%, and Tokyo 71.80%, with Tokyo being 74.14th. However, the vacancy rate is 5% in Hokkaido, 2.38% in Miyagi prefecture, 5.73% in Saitama prefecture, 2.19% in Chiba prefecture, and 2.80% in Tokyo, indicating that Tokyo has the lowest risk.Real estate investment is impossible without tenants.Location selection is very important in order to minimize risk.
As the situation continues to be unstable due to the coronavirus pandemic, properties in Tokyo, which are more stable than those in Europe and the United States, are attracting attention.
Regarding the outlook for 2021, JLL says, ``The amount of funds waiting for investment is increasing due to monetary easing by central banks in various countries, and the inflow of funds to Japan, which is politically stable and has a large market size, will continue,'' and real estate investment in Tokyo will continue. is also expected to remain stable.
Nationwide Rental Housing Survey Report
Exhibitor:NPO IREM JAPAN, Japan Rental Housing Management Association, LIFULL Co., Ltd.
Summary
- Despite the coronavirus pandemic, real estate investment in Tokyo from overseas ranked first in the world in the January-September period of 2020
- Tokyo has the highest occupancy rate among prefectures
- Location selection is important to reduce risk as much as possible
At Rich Road Co., Ltd., we will consistently support all aspects of investment real estate, from complete beginners to experienced people, from a wide range of real estate selection, loan consultations, post-purchase management, and renovations.
