Buying Property in Japan
Who is eligible to purchase real estate in Japan?
Anyone can purchase real estate in Japan. It is recommendable for visitors to possess a long-term visa or a permanent visa as it demonstrates a long-term commitment to living in the country, which can facilitate obtaining long-term financing. It is difficult to get a home loan from a Japanese bank today, even for Japanese citizens. Moreover, obtaining a home loan is virtually impossible without a proper visa and a steady job.
The cost of real estate
The cost of real estate in Japan depends greatly on the region in which the property is located. Tokyo is by far the most costly, although prices decrease gradually as the distance to the nearest station increases. In addition, typically older buildings are considerably cheaper than newer ones. Properties in remoter regions such as the Tohoku, Hokkaido or prefectures such as Shimane and Yamaguchi, tend to be less expensive. In some areas the local government has offered land for free, to people who agree to settle there. The most effective way to understand housing prices is to check nation-wide real estate search engines, which your Japan real estate agent can help you with.
How to obtain a (house) loan/mortgage in Japan?
Given the banking crisis that the Japanese economy has experienced, it has become difficult for Japanese citizens themselves to own a house, particularly if they need to finance the purchase with a home loan. If you intend to finance your Japan home purchase, it is important to have a financially suitable Japanese guarantor available to repay your loan in case you fail to pay.
Foreign residents will have good chances of obtaining a home loan if they:
- Have been living in Japan for a considerable span of time and can speak Japanese.
- They have a family in Japan. They are married to a Japanese citizen or have a child attending Japanese schools.
- They have a stable job in Japan, which they are likely to continue.
- They have good credit history.
- They are not willing to return to their home country before they pay off their home loan.
- They have desirable reasons to want to stay in Japan, are comfortable and well adapted to Japanese lifestyle.
The kind of real estate to choose for investment purposes
Japan is an earthquake-prone country. As no region in Japan is entirely safe from seismic activity, buying a house or apartment/flat has some inherent risks, as the property could be destroyed or damaged by earthquake at any time. To avoid this risk, a number of investors purchase land in larger cities, which they rent as parking space.
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