JAPAN BACK IN FAVOUR AS YEN HITS NEW LOW
Inquiries from Hongkongers with budgets of up to HK$2 million rise by 40 per cent this month as Japanese currency drops to lowest in 20 years
Hongkongers are returning to the property market in Japan after a two-year absence, taking advantage of a weakening yen, which is at a 20-year low against the US dollar.
“Inquiries for Japanese homes from Hongkongers have surged by up to 40 per cent this month,” said Anvy Cheung, chief executive of Sakura Global, which specialises in Japanese property.
“In the past two years, most of them just stayed on the sidelines, adopting a wait-and-see approach [owing to the pandemic].”
Most are looking for homes in Japan for investment or for holiday use, with budgets ranging from HK$1.5 million to HK$2 million, she added.
The Japanese yen, which has fallen 12 per cent since January, may continue to weaken against the dollar amid expectations that the Bank of Japan will lag behind its peers such as the US Federal Reserve in normalising monetary policy.
As the Hong Kong dollar is pegged to the US currency, the yen’s decline makes property investment more attractive to investors from the city.
The easing of travel regulations, which were introduced at the start of the pandemic two years ago, has also boosted investors’ confidence.
Polly Lo, a veteran investor in Japan, is now looking for a residential unit for her 28-year-old daughter, who has saved about HK$600,000.
Lo believes the amount would be enough to buy a studio flat of about 200 sq ft in Tokyo or a slightly bigger unit in Osaka.
She said that investing in Japanese property was a better option than parking money in Hong Kong banks, where the returns on time deposits do not amount to much.
“Besides, Japanese real estate is a better alternative now given the yen’s sharp fall and prospects of annual rental returns of as high as 4 per cent,” Lo said, who owns a shop in Osaka that brings her about HK$8,000 per month.
In Hong Kong, the world’s most expensive property market, home prices have soared to levels that are beyond the reach of the general public.
A 152 sq ft flat at Soyo in Mong Kok sold for about HK$3.4 million when the project launched in January.
“It is hard for my daughter to buy a flat in Hong Kong with her savings,” Lo said.
Others like Lo are also looking to use the yen’s depreciation to good effect.
Sophie Tsang, a 50-year-old information technology professional, plans to make her second investment in Japan.
Tsang, who bought a studio flat in Tokyo for HK$1 million about three years ago, has set her sights on a ryokan, a traditional Japanese inn. She has a budget of about HK$2 million to HK$3 million.
“Tourism in Japan will resume once the Covid-19 pandemic is over. I see it as a diversification of my investment, and it provides stable rental income,” said Tsang, who plans to retire next year.
JLL said the number of transactions for Japanese homes conducted by the company jumped 70 per cent year on year in the first quarter.
“The hefty increase was largely due to last year’s low base for comparison,” said Mandy Wong, head of international residential at JLL in Asia-Pacific.
Owing to the weakness of yen, she said some of her clients were now interested in buying more expensive homes in Tokyo, costing between HK$5 million and HK$20 million.
“They see a weaker yen as a bonus as these luxury homes are cheaper than before,” Wong said.