buying versus renting in Japan
Nyouyaku
Thanks for sharing your thoughts.
Indeed, new property in Japan is like a car. Once you drive it out of the show room, or open the front door, the value drops. However, if you don`t mind pre-owned homes, and buy around 5+ years old, then the initial drop in value is already priced in. So you don`t lose that value. the previous owner did.
Pre-owned homes hold their value in general, though depreciation takes its toll over the years. based on my own research and viewing, apartments over 5 years, the values held OK ,or rise a little depending on the area. Meguro-ku and Minato-ku faired OK.
The other key ingredient to buying in Japan is sub-zero interest. Generally about 0.875% p.a
At this rate, your interest is much lower than rent money per annum. Although no/little capital growth, you save money on the difference between renting and interest paid. Plus, you are building an asset. (If rent was around 7% as in Australia, better to rent. but of course, if interest was around 7%, the economy would be better, and inflation pushing up home prices, giving capital growth. (Its `6 - one half of a dozen`)
zero, and I think in Japan (and now the US as well
) you have to view purchasing a property a bit like purchasing a vehicle in that you do not buy a vehicle in order to make money but rather purchase one for the sake of utility. One has to see a house not as an investment but rather a place to live so buy only as large as you would need the actual space to live in, and not buy one that is oversized with the hopes of making money on the appreciation of the property. Regardless of knowing that you would not make money on buying a home, even if you knew you would lose some money, you still need to buy or rent a place in order to secure shelter. Just do not look at it as an investment vehicle and I am sure that you won't be as disappointed if you go in with this mindset.