Recently I saw an article about a former Australian model, Anton, who has gotten into real estate in Japan. We're periodically seeing news about really cheap (or free) properties for sale. I don't know how much they are promoting them overseas, but certainly for young Australians who are a little bit obsessed by Japan and also facing crazy real estate prices in their home country and also high costs of living, it's a temptation.
As an aside, David and I ate a light dinner last night for a combined total of 1,250 yen or AU$11, we could never do that in Australia. Yes, the exchange rate yen to Australian dollar is good at present, but it is definitely much more possible to eat out affordably in Japan than it is in Australia.
This is where we formerly lived for 13 years.
They knocked the house down a year after we
moved out of it and built a new one.
But where am I going with this blog post? No, I am not looking to invest in property in Japan (or Australia). I'm sharing because Anton had some insightful things to say about Japan:
“Japan has an ageing workforce and historically a 'scrap and rebuild' culture rather than a renovation culture. Houses built before 1981 are often considered outdated due to seismic code changes, which affects financing. Banks are less willing to lend on older homes, which is part of why they’re cheap.”
We'd long noted that renovation is much less common here, although perhaps that's changing.
He said the biggest risk was the misconception that cheap equals opportunity.
It's important to understand why the houses are cheap:
“Many of these homes are cheap because towns are shrinking, demand is weak, demolition costs exceed structure value.” He said in many cases, the land has value but the house itself may have negative value.
A house can also be cheap if someone has died in it.
“If someone thinks they can renovate and flip like in Sydney or Melbourne, they will likely be disappointed. Appreciation works very differently in Japan. You must buy for lifestyle or long-term strategy, not quick resale profit.”
Then he says more about life in Japan:
“Ownership is easy,” he said, but “living here long term requires planning”.
"Living in Japan is very different from visiting during cherry blossom season. Japan rewards patience, cultural respect and long-term thinking.”
Living in another country is very different to being a tourist. I think this is where I run into difficulty talking with people who have only ever travelled overseas as a tourist. It is harder, but in many ways also easier to live in a country rather than be a tourist. When you live somewhere you get insider knowledge. You learn how (some) things work, you start to understand the unspoken rules. You start to operate in ways that create less waves around you. You find a dentist and a hairdresser, you have a source for regular medication. You know where to go to find what groceries you want to buy.
In any case, I read many things during my week and I take notice of the ones that my mind returns to. This was one that had some great wisdom, though admittedly it was buried way down at the bottom of the article where many would never see it.
See the full story here.
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