When you purchase real estate in Japan, you will be worried about upcoming falling in price of your apartment.
Assumed that you purchase an apartment of 100 yen, and you receive 10 yen per a year ( = yield rate is 10 % ).
Then you have owned this apartment for 5 years.
Now, you will think that you can get profit of 50 yen.
But, this is not correct.
Because, when you try to sell your property, the selling price may be 60 yen.
In that case, you can gain money of only 110 yen ( 50 yen of Rental fee + 60 yen of selling price ).
You took risks to purchase real estate and get only 10 yen ( 110 yen – 100 yen ), though you have spent 5 years.
10 yen ÷ 100 yen ÷ 5 years = 0.02
So, annual yield rate is only 2 %.
So, when you think of buying real estate in Japan, you have to think of your future selling price.
Some items affect selling price of real estate
Basically, market price of used real estate will be affected by following conditions.
① Age of building
( In Japan, price of real estate will decrease year by year. There was a era that real estate price increased year by year. But, such era will not come again. )
② Atmosphere of surroundings
( If your property is located in popular area, like Shibuya, Roppongi, the value of your property is higher than area like Adachi ward. )
( Market price of an apartment at higher story will be higher than lower story. )
④ Direction of the rooms
( when balcony looks toward South,
you can get more sunshine. In Japan, a lot of people put on Futon on rail on balcony. So, sunshine is important. )
⑤ Sincerity of apartment management company
( When management of apartment is bad, it will affect value of your apartment. In order to know attitude of management company, you need to visit apartment on the site. If there are a lot of garbage on hall, it will be bad sign. )
Let’s say, an apartment is built in 2016.
In 2017, the market price of this apartment will decrease 10 %.
And in 2026, the market price of this apartment will decrease 24 % compared to 2016.
And in 2036, the market price of this apartment will decrease 40 % compared to 2016.
In the case of detached house, portion of building is larger than in the case of apartment.
Assumed that Selling price is 100 yen.
In the case of detached house : Price of land 50 yen, Price of house is 50 yen.
In the case of apartment : Price of land 20 yen, Price of house is 80 yen.
First 15 years from its completion, the decrease of resell value is sudden and after 15 years from its completion, the decrease of resell value is gradual, in general.