Japan Foreclosed Property 2015-2016 - Buy this 5th edition report!

Over the years, this ebook has been enhanced with additional research to offer a comprehensive appraisal of the Japanese foreclosed property market, as well as offering economic and industry analysis. The author travels to Japan regularly to keep abreast of the local market conditions, and has purchased several foreclosed properties, as well as bidding on others. Japan is one of the few markets offering high-yielding property investment opportunities. Contrary to the 'rural depopulation' scepticism, the urban centres are growing, and they have always been a magnet for expatriates in Asia. Japan is a place where expats, investors (big or small) can make highly profitable real estate investments. Japan is a large market, with a plethora of cheap properties up for tender by the courts. Few other Western nations offer such cheap property so close to major infrastructure. Japan is unique in this respect, and it offers such a different life experience, which also makes it special. There is a plethora of property is depopulating rural areas, however there are fortnightly tenders offering plenty of property in Japan's cities as well. I bought a dormitory 1hr from Tokyo for just $US30,000.
You can view foreclosed properties listed for as little as $US10,000 in Japan thanks to depopulation and a culture that is geared towards working for the state. I bought foreclosed properties in Japan and now I reveal all in our expanded 350+page report. The information you need to know, strategies to apply, where to get help, and the tools to use. We even help you avoid the tsunami and nuclear risks since I was a geologist/mining finance analyst in a past life. Check out the "feedback" in our blog for stories of success by customers of our previous reports.

Download Table of Contents here.

Wednesday, December 29, 2010

Is it a good time to buy property in Japan?

Another writer, Chris Dillon, Dillon Communications, has advanced the value of investing in foreclosed property in Japan, so I wanted to assess some of his logic for recommending such an investment. Firstly, buying property in Japan for me is not simply about making money, as I am sure some of you are not out primarily to make money. Japan is a nice place to live or stay, so you would like a 'base station' in order to partake in some foreign experiences, whether its bars, bird watching or touring around, or simply retiring.
I agree with him that if you are looking for capital growth its hard not to look outside the cities. I think there are certain areas outside which appeal for lifestyle reasons, i.e. Holiday houses in the west of Tokyo and Saitama, which make excellent weekend 'get-a-ways'.
He likes old apartments because they offer great yields. I would be inclined to steer away from such old places because you are paying out too much in property management fees, over which you have no control. Why buy an apartment on good yields when you can buy a house on good yields, and pay only low taxes.
In a sense I agree with him about the bad news about Japan. All the bad news has effectively been priced into the market. What else can go wrong? Well, on the basis of his argument, I would have to say the currency. He says the 'yen's strength is not a major issue'. Indeed, because it is not strong, so much as "relatively strong" against other very weak major currencies, namely the Euro and USD. They are hardly a good standard if you are looking at currency diversification. If you were looking at strong or 'hard' currencies, you would be looking at the AUD. Incidentally, Australia has recorded the strongest property market over the last year. Another good property market is the Philippines, with its 7% GDP growth, 2% population growth and strong property price growth and still reasonable yields. It is also a relatively strong currency. More importantly, Japan has a public sector debt of 200% of GDP. There is every reason to believe a fair slug of that will be repaid by debasing the currency in the next decade, as the US and Euro zones do likewise.
He does make a good point:
"One of the biggest is in the preference for new property. In Japan, used homes represent about 13% of total sales, compared to 78% in the United States and 89% in Britain. That is changing, as the Japanese government encourages the construction of long-life homes, but many people still see homes as consumable items".
The significance of this is that a steep discount applies to old housing, such that you can buy an old house for essentially less than zero in the foreclosed market. People do not want old housing, particularly due to the lack of insulation, but also shoddy building practices, lesser durability.

He makes a good point about buying rural property. The population rate is expected to collapse in rural areas, so the closer you can live to major cities the better. The flipside is that wasteful use of infrastructure might result in either tax incentives for rural areas, or eventually stronger migration. The cheaper that rural property becomes the more attractive it becomes for other purposes, whether lifestyle activities or other activities. It must be acknowledged that people have a far higher level of mobility than in the past, so we do have to question old paradigms.

NZ Property Guide Philippine Real Estate Guide Japan Foreclosed Guide

Friday, December 17, 2010

Yamanashi foreclosed properties, Japan

There is a 2LDK apartment in Kofu, Yamanashi Prefecture for a nominal Y1.008 million. The apartment is on the 3rd floor, and its 51m2 in area. You can secure the apartment for just Y252,000. The building is 22 years old, and is located 2.16km north of Kokubo Station. See the http://bit.sikkou.jp website for more details.
This is the only cheap property I could find in Kofu. Mind you, I would not buy an apartment. Better to buy house & land.

How to search for Japanese foreclosed properties

There are seven steps to finding foreclosed properties in Japan. You will probably need the images in order to follow this process. Just email me if you would like a copy of this 'Bit-sikkou-search-file'.
1. Go to the Bit-Sikkou website - See http://bit.sikkou.jp/
2. Select a region which interests you. I selected the Kanto region.
3. Select a prefecture within the region = I selected the Ibaraki region
4. Select a search mode. We can search by city, rail line/station or court branch. This screen shot shows the basic format, however specific details will of course vary by prefecture.
5. Narrow your search. I selected all forms of property, I selected properties between Yen 1-7million, and properties in all areas. Remember, you can use Google to translate this page, so you are not searching blind. Type the station name into Google Maps to find the location if you are unsure. i.e. www.google.com/maps or www.google.co.jp/maps (street locations & Japanese kanji).
6. Select bidding period. The continuation of the last page requires us to select the bidding period. Avoid selecting the ‘farmland’ option because these lands are assigned or restricted to farmers.
7. Foreclosed property listings. This page shows a list of the properties matching your criteria. Translate to English (right click screen, then ‘translate’). Normally, having established its house & land, I will look at the basic parameters (age, size of house, price), then go straight to the specific listing (in blue) and download the PDF to look at the house photos. The next issue is finding the location on Google Maps.

Thursday, December 16, 2010

Listings of foreclosed properties in Ibaraki Prefecture

There are any number of places to buy foreclosed property in Japan. Away from the larger cities, you can find very cheap houses for less than $25,000. I am doing a random search here to give people an idea of the types of property available. My focus in this post is Ibaraki Prefecture, just north of Tokyo. Probably not my favourite place, but its fairly close to Narita (Tokyo) Airport, so good international connections for those looking for a holiday house.
This particular house I found listed on the http://bit.sikkou.jp website. When I searched for the address of this house, I came up with another foreclosed search website you might prefer. The minimum purchase price for this property is Y1.76 million ($US20,000), and a deposit of Y440,000 is required. You can download the specifications from either website as a PDF file.
The land area is 499m2, the house is 27 years old, and its 127m2 in floor area. The location of the property is here.
The address of this property in Japanese is:

Outlook for Australia property

In a number of blogs, we have argued that the Australian property market is not going to collapse. The IMF has come out with the same prognosis. We must remember that the Australian economy has a number of advantages:
1. Currency flexibility - weaker commodity prices or volumes drive exchange rates, and with commodities priced in USD, currency movements provide the perfect hedge.
2. Immigration - The Australian government has the capacity to change the number of immigrants to stimulate domestic demand
3. Future fund - The Australian government has a $200 billion future fund, which could be used to build a high speed, train service around the SE-East coasts of Australia.
4. Business investment - Irrespective of any weakness in China, there will still be a desire to increase commodity supply capacity from Australia, whether coal, iron ore, coal seam gas, etc.
5. Gold mining - Australia can expect a gold mining boom. Australian companies are one of the biggest investors in mining around the world.
6. Government debt - The Australian govt has a significant capacity to sustain spending over 5-10 years. It is probable that this will involve capacity-building, e.g. ports and railways to facilitate future mining, mostly in Qld, NSW, Victoria, NT. I think public sector debt is around 50% of GDP if memory serves me. It could go to 120% without much complaint given the positive outlook.
7. Zoning laws - The government will persist in controlling the release of land, which will assist with sustaining high land prices.
8. Global political revolution - One might also expect a global revolution in terms of the way government is administered.

These parameters will ensure that property holders sustain their property investment value, and that Australia even needs more home construction in coming years. There is no over-supply.

Thursday, November 25, 2010

The benefits of having a holiday house in Japan

I just wrote a blog article about the benefits of living and travelling to Japan. It also can make sense to have a holiday house there given the VERY low cost of foreclosed property. The cost can range from as low as $10,000 in the depopulating rural areas to Y3mil just 1 hour from Tokyo. I paid Y2.8mil ($US30,000) for my place that far from Tokyo. It costs me just $300/yr to maintain, but more of course if I need to use utilities when living there. I bought here because I could either:
1. I could get into the city for just $3.50 train and $2.50 bus (or bike for free). I like to ride the bike when I'm pissed.
2. I can elect to stay in the city all night and get the first train home.
3. I have good services like restaurants, izakayas and department stores a bicycle ride away.
4. I have wonderful mountain valley hinterland to explore on my bike. Anyone been up the Naguri valley. A recommended bike ride. I have also canoed down the Naguri river, as well as the neighbouring river as far as Ome.

I connect the electricity before I arrive and disconnect it when I leave by email with Tokyo Electric. Very easy. If I want to travel around Japan on my Japan Rail Pass, I get an early train to Shinbuya, so boarding a 6:30AM Shinkansen to say Fukushima, then a local train into the mountains. Lunch near a Buddhist temple, maybe staying in a business hotel in Niigata, or capsule hotel in Fukuoka (if travelling south), allowing me to explore a new area, or I can return home that night. I just have to leave by 8pm to give myself enough time. That is a lot of time.
Want to learn more about Japan? Want to buy property in Japan? Japan Foreclosed Guide.

I plan to be in Japan in May-June 2010. Busy until then. I don't mind catching up with interested persons.

Sunday, November 14, 2010

Mini-housing demand in Tokyo growing

The demand for mini-housing in Japan has drawn the attention of CNN.com. See this CNN report on the increasing popularity of ultra-small houses. This house was built for $500,000 on a former car space...building up instead of laterally. There are similar opportunities to fitout ultra-small apartments. Specially designed furniture can make those 20m2 apartment units relatively spacious.
The appeal of course of these cramped apartments is the opportunity to live in nice communities. Maybe that means spending more time outdoors. Where you might ask? Well, some areas are more spacious than you think. I previously lived in Sumiyoshi, in east Tokyo. One of the benefits was the ability to spend time in the outdoors. Japanese rivers provide one of the most spacious environments in Japanese cities. There are pathways right stretching km's up rivers. For example, the Arakawa River.
I question the logic of this house. Does he foresee a trend of more Japanese mothers having incestuous relationships with their fully-grown sons. Japan is indeed weird. I meant all types in Japan...some with experiences stranger than fiction.

Question? What does he do with his mother when he wants to bring a GF home? Only in Japan.

NZ Property Guide Philippine Real Estate Guide Japan Foreclosed Guide

Saturday, November 13, 2010

Where to Place Your Money

The EU, Japan and the US are struggling to keep their economies going, and are resorting to 'quantitative easing' in order to support economic demand. The Fed is sure to engage in further currency debasement in order to keep employment under the psychologically important 10% level. The private sector added 65,000 jobs, however this was offset by a more bearish loss of 160,000 jobs from the public sector, for a net loss of 95,000 in the last reporting month.
Expect the Eurozone and Japan to debase their currencies by even more in order to prop up their currencies. People are talking about a new currency system. This is a side-show to the real issue. A new style of governance. The gross mal-administration of government - clearly depicted in spades, hearts, clubs and diamonds - shows how pathetic politicians are. They did not earn their way into these jobs. There is no credible reason why you would give a politician who has administered a household budget control of 3-50% of your local economy, depending on if you are European or liberal Western.
The reality is that we are living in a period of pseudo-liberty. You never really had any freedom. Governments gave you political rights because they had you by the balls. Every time they needed money...they squeezed your testicles. If you had more money, then they came in the back door. So, the question is....how to protect your money.
Clearly gold and other precious metals are the order of the day. Historically, gold has always risen to a peak value which relates to a Dow Jones Index value / Gold price of 4-5x. That ratio, at the current Dow Index of 11,100 points, equates to a peak value of $2775/oz. Of course if the Fed engages in more quantitative easing, then the Dow could well go higher, and then gold could go higher. Of course you don't want to place all your money in gold.
Another appealing area is the commodity and emerging markets. Australia and NZ are safe, strong economies, but their property markets are priced high. Unless you are looking at cheap rural properties, you are better off investing in emerging Asian markets like the Philippines. It offers the best yields in Asia after Indonesia, except that there is far less prospect of Muslim extremism (Muslims are largely confined to the southern island, and extremist activism has declined). In addition, visa restrictions and language barriers in Indonesia makes the Philippines far more attractive. We already bought property in Lipa City, a satellite city between Manila and Batangas with 3 shopping malls and a particularly cool climate.

It is a personal decision - where to place your money. Personally, I like to spread it around for lifestyle reasons, even if that means having 3 mountain bikes, 3 washing machines. I might mention that you can buy white goods for a third of the cost as Australia in the Philippines, and its the same for comparable furniture. I like the low cost, beauty, high yields and culture of Japan. I like the easy of living, the relatively good 8% yields and fun of the Philippines, and I like the cool temperate climate of Australia/NZ. All of these places are good for reasons. In Australia, I'd buy gold stocks, mainly explorers in Africa and PNG. See my Specs blog.

I bought a home base in Japan for $US28000 (just 1hr from Tokyo), an investment property offering 13% yield for $US38,000. In rural areas, they are as little as $10,000. i.e. $10,000 outside Nagano City, which is an international airport and ski resort area. In the Philippines we bought foreclosed land lots in a failed subdivision in Lipa City, strategically located close to a planned school, opposite a community garden destined to become a high-class residential precinct, close to the main highway. In NZ, we bought a summer house in a rural area because the currency was only 0.50-0.55 to the USD, so it was a lifestyle decision and currency play. NZ is not growing much, however in 10-15 years it will have an energy boom. When a 4 million person economy finds oil & gas, it makes a big impact. So NZ will not always be the poor Western cousin of the OECD. In this commodities/energy boom, people will start finding energy resources.

Tuesday, October 19, 2010

Foreclosed property opportunities in the USA

It is getting to the point where Australians and NZ'ers, indeed Canadians and South Africans, Chileans and Brazilians, indeed the people's from all commodity-producing countries might want to consider buying foreclosed property in the United States.

The reasons are clear in this article “Bank of America lifts foreclosure freeze in 23 states” by Charles Riley, staff reporter, Yahoo News, website, 19th Oct 2010:
"All told, 1.8 million loans are in foreclosure in the 23 so-called judicial states, while 1.3 million are pending elsewhere in the country, according to a Morgan Stanley analyst report".
The implication of this article is that there is a great deal of property in the United States, principally California, Florida, Nevada and Wisconsin from my understanding, which is offered at very low prices, at a time when the USD is very cheap. I believe the USD has bottomed against the Yen, so buying property makes even more sense for Japanese and European buyers, as I believe it will be the Europeans and Japanese which are going to see the greatest currency debasement moving forward. It is of course all good news for 'hard currency' commodity producers.

The other appealing market for foreclosed property is Japan. In fact, this market is more appealing because the yields on property are 13% now, whereas the US market will never be so attractive. One might wonder however....does one want to invest in debasing currencies? That need not concern you so long as you hold real assets like property. The question you need to ask is whether there will be an eventual market for your property, so this depends on questions like:
1. Is it imminent that Japan will open up to immigration?
2. Will US population (or immigration) growth absorb all the new property?
3. What is the base value of US property? Japan I would suggest has already bottomed.
4. How long will it take for the USA foreclosed properties to clear?

The other question is - do you want to invest, or is this purely a lifestyle property. I bought one of each in Japan...a dormitory 1hr from Tokyo, and a more distant investment property in a tourist area offering 13% yield. You can buy a house in rural Japan for as little as $US10,000. In the USA, you will pay from $US30,000. It is hard to imagine a place in Japan which would pose a threat. I don't even both insuring my property in Japan. Its so safe. Some properties are cheaper than land value if they burned down. In Japan, only foreigners with generous holidays can utilise these properties because the Japan Rail Pass is such a 'bonus' for foreign tourists. Japanese people pay $300 to go from Tokyo to Fukuoka...foreigners can travel in Japan for up to a week for that cost.....unlimited travel on Japan Rail lines...including the Shinkansen. A great country to holiday and visit. If you have not travelled up these remote river valleys by train, you have indeed missed an experience. I have acquired several JR Passes for this purpose...always returning to my Tokyo base most nights. i.e. I would board a JR Shinjuku train at 6AM to say Niiagata, then I would get there at 8AM, so I was free to explore the countryside in local trains for the day, before returning on the 'bullet train' at 4-5PM, so I'd be back in Tokyo for dinner.
There I would enjoy some jazz or blues in Nerima basement restaurant, or a beer in a izakaya, or the Hub English pub chain. I particularly like a bar in Nerima which serves Hoegarden beer on tap...its my favourite beer...aside from Londonite (India)....a place I'd never go back to enjoy it.
Yep... I love Japan. I'm going back this May 2011. Love it!

Sunday, October 10, 2010

Japanese residents for Philippines property?

Anyone in Japan interested in taking advantage in the forthcoming weakness in the Yen. The Philippines just might be the place to buy an investment property. See my forex report, but consider that Philippine banks in Japan are offering loans to buy property in the Philippines. I'm not sure if this is just for expat Filipinos, but I see no reason why there would be such a restriction. Anyway, you can ask yourself. The Philippine banks in Japan are BPI, BDO, Metrobank, Union and Philippines National Bank (PNB). I note that PNB has an office in Tokyo - see here for details. They offer loans to Filipinos and foreigners, whether or not you are married to a Filipino.
I would be interested if lenders can avail of those low-interest Japanese funds in order to buy property abroad? Worth finding out. Actually the rates are on their website. I believe you can get rates of 10% in the Philippines for a 5 year term, compared to just 6.5% in Japan for loans on Philippine property. See here.

NZ Property Guide Philippine Real Estate Guide Japan Foreclosed Guide

Australian dollar forex trade with property twist

I just noticed an increase in orders for my Japan Foreclosed Property Report. Interestingly I was just looking at the currency markets when an order came in...maybe some of you were struck by the same thought. I have made several posts about the impending realignment in currencies. The big news is that we about to see a collapsing Yen and a corresponding high Australian dollar. i.e. The Yen carry trade is about to have a 2nd breath of life. If you jump on this trade, you will be set to buy a foreclosed property in Japan at the end of it. Check out the chart on my forex blog.
My thoughts are that you could buy AUD:JPY as a CFD contract with a group like CMC Markets in Australia, then at the end of the trade, you liquidate and buy a property in Japan. See www.cmcmarkets.com.au.

Saturday, October 9, 2010

The cost of living and property overseas

For those interested in buying (foreclosed) property in the Asia-Pacific region, we think value-wise, Japan and the Philippines make a lot of sense. Of course value is absolute as well as relative, and one needs to consider these values from your perspective of value. This I have done, and it has culminated in reports on the Philippines, New Zealand and Japan. If you like the Philippines, you might also like Thailand. Japan has a great appeal to many young and old because of its rich cultural experience, great services and infrastructure. Mind you a great many Westerners these days go to the Philippines for medical treatment on the cheap. I have used one of the private hospitals and they do have experiences, Western-educated doctors. Anyway, the property reports aside, if you are interested in the countries, then I have blogs pertaining to these countries where I explore more of the issues living in these countries.
1. Living in NZ - In this blog I also talk a lot about Australia - my home country - as they have similarities, and people interested in NZ are usually interested in Australia.

There are of course other countries where you can live and even buy property, however I find these countries the least restrictive in the Asia-Pacific. i.e. You can stay in the Philippines by extending your tourist visa for 18 months before you have to leave. But they don't mind if you come right back. Its just a question of paying around P1500 per month. You can stay in Japan for 3 months. They will let you extend, or you can leave & re-enter, in which case they will ask questions, unless you have a girlfriend who will sponsor you. I did, and was able to stay there over 2 years. I also worked these on another occasion. Teaching English is a great way to get sponsored to live in Japan...if you have a BSc/BA degree. NZ allows you to stay 3 months, but you can extend for 6 months (which is the mnimum property lease period), and its easy enough to go to Australia for another 6 months if you want to stick around the region. Many young and elderly people live from campervans in these countries.

The humble chopstick - money making miracle

Today I would like to pay homage to the chopstick. After purchasing a property several years ago I greatly profited from the humble chop stick. Far from being simply a eating implement, it is also a versatile cleaning tool. Upon purchasing a property in Japan, some of you will simply contract a local cleaner to clean your home. I did it myself and to good effect thanks to the chopstick. It is particularly useful for cleaning the grime around the bathroom and window frames. You simply break the sticks into 'edged' implements and you get considerable value from what is otherwise a free give-away from your local take-away store.

The other treasure when you are buying a home is the Cainz Home Hardware chain. If or when I buy my next foreclosed property, I will be sure to buy near a Cainz Home store because they simply make renovation very easy. Their products are very reasonably priced, and with so many staff, you are bound to find someone with some level of English skill. They are so helpful I was even able to work things out with sign language, as I have limited Japanese. Check out their website for a location guide to their stores.

Another treasure for me is the Hoka Hoka-tei take-away chain store. I swear you do not want to be located too far away from one of these chain stores. They offer a great array of healthy take away meals for very reasonable prices. I used to always get a salmon and rice dish for Y380 ($US5). Very good meals. Make sure you live near one of those...they are everywhere. You will find them overseas these days, but its not the same menu as in Japan. eg. I have seen them in Australia, the Philippines, but that is a Westernised menu, with a far smaller range of choices.
In Japan they have over 2,000 franchise outlets. Sadly their store locator is only in Japanese, and the Google translator will not work with the Flash software. However, if you click on any 'graphical' 'prefectural button on the map, you will have the option of a scroll-selection in English if you remain in Google Translator, so you can find your nearest store.

The implication is that buying, renovating and living in Japan can be VERY CHEAP. Yes, contrary to popular belief life in Japan is not always the rip-off you might have believed. Food is expensive, but you can eat at izakayas very reasonably. The cost of drinking these days is also very reasonable. I often go to The Hub as a drinking venue in Tokyo and other cities because they attract a lot of foreigners, or Japanese people who want to meet foreigners.
I don't drink much now but the roof-top bars are also good value in you like summer drinking on top of shopping malls. The utilities and eating out in Japan are still expensive, but there are work arounds....some of which are not available in other countries. I can keep my electricity connected for months on a basic monthly service fee in I email them. You can also get pre-paid internet services which make a lot of sense. House insurance is very cheap, as is local government rates. Public transport in Japan is very expensive for inter-city travel, but if you get a few Japan Rail Passes before you go....its exceptionally cheap.

Thursday, October 7, 2010

Australian property - is it overpriced?

There is no question that Australian property is over-valued. But we need to acknowledge that it is for structural reasons, and just as the Chinese govt is keeping its currency artificially low, the Australian govt is keeping its property prices artificially high. The Chinese govt using currency regulation; and the Australian govt uses land use regulation. So much for the communist-democratic dichotomy. Near-perfect synergy if you ask me....so we will meet somewhere in the middle, but since we will end up selling our individualistic souls in the process...engaging in moral relativism or moral scepticism if you prefer...we will end up with global collectivism...with govts working in synergy to control your lives. This is probably reason enough to have property or other assets dispersed all around the world. You know about having a diversified asset portfolio...well this is reason enough to spread your exposure. Governments are playing lottery with your money...and lives. The reason they hardly persecute anyone anymore is because you are drowned out by PC-compliant media and organisations, and because they have your money. Is there a conspiracy...its not centralised....and certainly not so conceptually well-planned. Its an alignment of economically and politically compatible interests. They don’t even realise what they are doing to their national values.
So back to the Australian property market. The IMF says the Australian property market is overvalued....Duh! It has been for a decade. The issue is whether its going to fall. The answer is no...at least not nationwide. They might do a few ‘strategically’ placed land releases to the poor, but expect the Australian govt to control prices. You might think they cannot do this. They can so long as they control interest rates (and they do) and the China has a requirement for our commodities. This will be the case for 20 years so no problem. We cannot therefore expect huge increases in Australian property, but you can reasonably expect good growth. Probably bubble? Not likely...at least not for the next 10 years. Strong commodity prices are going to demand interest rate increases. Expect a strong currency too as property prices rise. The AUD is going to break parity with the USD, and do even better. Yep we are probably looking at 1.15. Why? Paradoxically because of high property debt which will give Australians some sensitivity towards excessive consumption. The problem of course is greater import penetration. In a weak global market foreign enterprises will be targeting Australia. So in the long term, we might expect import penetration to balance out those currency gains. Govt spending will also have an impact. The high prices can be expected to remain in the cities because of strong population growth and employment.

Wednesday, October 6, 2010

Dealing with overlapping foreclosed property boundaries

A person has asked me a question about foreclosed property. From the outset can I say, I love to help people. The problem is that I have the power to help a great many people through books and the internet, and would like to do so in the interests of the greatest number. I also have a personal interest:
1. Your best interests. I put a lot of thought into the book. Asking me questions on the fly is going to waste my time, and offer you a less than satisfying answer. If this person purchased the book, that is fine, but I believe I dealt with this question in the book. In any respect, the purpose of this website is to apply the principles of critical thinking to investment - that is 'your critical thinking'...not mine. Its ok to make a mistake, so long as you self-reflect, learn and improve. I cannot provide self-assurance through every real estate transaction, I can only offer a minimal service. Real estate agents charge huge fees for a customised service. Partly I want to offer a reply to this because he might have received bad advice...depending on his circumstances...only he should decide.
2. Sustaining myself. This is not a non-profit exercise. The less money I make from books, the more time I have to invest and trade stocks. The two do not go together very well, because there is a huge compulsion for me to watch the equity markets, which means researching stocks. This can involve researching entire industries. For this reason, in the long term writing has to be profitable.
I do answer questions when asked on most occasions, however I would hope you would just buy the book because that is why I wrote it, and I really want to finish other books....and of course I need to watch my gold stocks. :)

Now - problems with houses overlapping property boundaries
The writer asks....[I summarise for the sake of privacy]....
I have saved up about US$10,000, so I am aiming for a cheap rural property to start off with. I am looking at a place in a rural area with a minimum bid of about $8,000, the agent I am dealing with has told me to let it go and wait for another property because as it seems, part of the house (literally not even a foot of the corner) is technically on the neighbours property. The house is huge, with enough room for a garden in the back and is in a good location for what I need, so I really don't want to pass up a house in my price range just because the neighbours might try to muscle some cash from me.
I just thought maybe you could give me an opinion on what I should do because you actually know what you are talking about.I was thinking I should bid anyway, and hopefully get it for $9,000-10,000. Then try meeting the neighbours, explaining my situation, befriending them and hopefully they won't mind that a foot of my house goes into their massive block of land. If they were hostile, I could always just renovate the house, as the actual part that is on their property isn't part of the main house and I could either knock it down or hire someone in to renovate the corner off and keep the house within my limits. Or a third option, I thought I could offer the neighbours some cash for the 1-2m strip of land that borders our two properties. Those are just some thoughts I had to get around this obstacle, as I have definitely fallen for this property and really don't want to lose this chance.
My response is that if the property is perfect than you should buy it...but is it perfect. Identifying such 'hot opportunities' is what investment is all about. Japanese people don't like to deal with conflict. If you are a Westerner dealing with a foreigner, they might have contempt for you. Some are very friendly and accommodating though, so it can do either way. There is good news...they cannot demand that you destroy your home, and they cannot destroy it under some vexing threat. They could take you to court, but Japanese tend not to do that. In most cases a person will negotiate to swap some land, i.e. I had a house like that, and the counterpart gave me extra land, and I gave him extra carspace. Some might not want more land in this economy, and might want more money....and they might want excessive money, and treat you with disrespect, so this is the risk, and this is partly why the property is cheap...but its also cheap because its rural. For this reason, I think you could have a gem. Congrats on finding it! But don't jump yet...Why take risks you don't need to. Why not talk to the neighbour and get an agreement before you buy. There is of course the risk he might bid as well. Hmmm...Difficult issue...but not a lot of money to waste. The issue is I think awareness of costs. It might cost you Y50,000 for a surveyor to resurvey the land, and then you need to have the title transferred. I can't recall what I paid for that....maybe another Y50,000. Hopefully you will not have to pay for land, if you can swap. If he is extortive in buying off the 'offending land', it is his concern because you are using it rent free. He can only take you to court....but the issue is...he can make you pay 'psychologically', so you might need to have a stronger 'stoic' personality...and thus like stress. If its a rural person, they can get the community against you. I personally think its far easier if you have a Japanese wife to help negotiate a settlement. Foreigners smell like roses if there is a Japanese person involved. I would suggest that you try get an easement for the land, as well as the mere property boundaries...and I would suggest you ought to give him the better land in any swap, and pay for any surveying. So I think its a good deal for you..as its incremental expenditure....and it could go really well.
I also think a 'corner' of a property is easy for the neighbour to excise, but it will depend on the specifics...but its probably true he does not benefit from any of your land. This is a common problem in Japan. If you have a problem, maybe you can get a public notary, a local govt legal advisor or a person they respect to adjudicate. Or any children they have if they speak your language. Most Japanese children hate their parents, so you might have a real ally. :) joke lan.
I think you should not wait....and I'd just take the risk because if its so cheap, you are merely scaring the neighbour into buying it themselves, as they might not want to live near a foreigner....particularly as its so cheap. Even if they have no money, they may badger their kids in the city to buy it for them. I think its a prize - grab it if its a decent place to live...there are plenty of such houses in depopulating Japan.

Anyway, here is my answer! Bargain, but as a lifestyle block...hard to sell because of depopulation, and it might be hard to rent to Japanese, so try foreigners, as it sounds like you will be close to international airport. Personally, you might find the agent is your competition. Don't deal with agents...or maybe he is just not a critical thinker. I find asking uncritical thinkers can only cloud your good judgement. Be strong! Japanese are overtly 'too safe' so they don't work through problems readily if they can pay more to go around them.

Thank you for confirming 'independently' that there are real bargains in Japan....and so close to an international airport....for foreign buyers. Well done! Glad you asked the question. :) Frankly, you had me at hello! lol

Wednesday, September 29, 2010

The AUD will continue to diverge from the NZD

We can see from the following chart that the NZD is in a long term decline against the AUD. We might ask why, and what prospects are there that this trend could turn around. The NZD:AUD decline since 2005 marks the start of huge capital investments in Australia, which has resulted in Australia's national income and savings surging whilst NZ's has gone backwards. This of course mostly arises due to mining and energy investment in Australia. See chart in Google Finance.
The significant rallies in the NZD that you see in that period relate to rises in NZ interest rates, and the NZ Treasuries efforts to quash NZ domestic spending....which was mostly on the rural batch, as well as the ancillary jet ski, motor bike, fishing boat and jacuzzi which went with it. Today the batch is perceived as a waste of money, courtesy of a change in government policy, which has ceased to reward such lifestyle decisions. Now, a great many NZ'ers are selling their 'sections' they use for trout fishing, or their holiday house by the sea. The market will probably resume however, and the strong Australian dollar might just be the impetus.

Australians have to be asking themselves whether anything is going to change. The answer is Yes, but not for probably another 5-10 years. Why do I say that? Well, NZ has to absorb a great deal of housing debt, so there is not going to be any significant spike in interest rates yet. Australia has even more debt, but far better prospects for paying it off. There will also be a stronger Aust economy, with the prospect of stronger interest rates making it even easier for the AUD to outpace the NZD.
It might not be so evident yet, but I see NZ having its own resource boom in a few years. Why? Well, NZ is a relatively small, unmineralised country. Its rocks simply have not been around long enough, and the mineralised core from the current mountain building will not be exposed for another 10 million years. The country does however have large tracts of maritime territory. In fact its the size of the EC. This maritime territory is known to possess vast resources of methane hydrates. In addition, these offshore sedimentary basins may contain vast oil & gas resources. They have not been significantly tested. Even NZ's sole producing basin - the on & offshore Taranaki Basin has hardly been explored, particularly at depth.
It was only last year that the country commissioned a relatively small oil & gas field called the Tui field. The impact of the field on NZ's terms of trade were significant, despite its small size. The Chinese, Indians and others are going to be looking for cheap energy inventories in future years. With access to such resources tied up by major oil & gas producers, extorting high prices for their products and resources, its probable that places like NZ are going to attract a greater share of the exploration dollars, and some of this will lead to success. A significant find is probable, and for a 4.3mil population, its probable that it will make a big difference, not only in pushing up the currency, but by stimulating interest in NZ's offshore basins, which will attract even more interest.
This will take 10-20 years to unfold of course. The implication however might be significant if you perceive NZ as a nice place to retire, or to buy a holiday house. In the short term, the NZD is certain to continue its fall, but it might be a good idea to consider these factors when considering retirement in NZ. In the short term however:
1. NZ immigration is mostly outwards to Australia - that is - Australia's is growing faster
2. Australian export volumes and prices are fairing better - even though NZ milk and timber is doing well
3. Australian business investment is phenomenable, NZ lacklustre
4. Australian savings are far higher
5. AUD will out-perform the NZD for the next 5-10 years, so expect the NZD and AUD gap to continue its divergence
6. Thereafter (say 15-20years off) you might expect the NZD to recover, and do rather well based on my expectations for the recovery of methane hydrates and conventional oil & gas offshore, as well as the mining of coastal titanomagnetite (titanium-rich iron ore), which will by that time be far more strategically important. Currently Ti-Fe is hard to separate and use, and the appeal of high strength steel alloys is only just starting to take off. NZ deposits are relatively remote, so early mining will be of Chinese, PNG and Russian deposits.

The other important factor when you make these Aust-NZ comparisons is to consider the extent to which NZ will benefit from integration with Australia. The issue of course is that NZ is a lovely place, but nothing happens here. If we want to look at what difference greater integration is going to make, then we only need look at South Australia. Does it benefit from being part of Australia? Not significantly, because like NZ, its a small population remote from the rest of Australia. And NZ is split into two islands, so its like two Sth Australia's. Australia is very much concentrated on NSW, Victoria, Queensland and WA. The other states are really mere appendages to the demand created by these states, whether its in existing population or population growth-related demand.
The appeal of NZ integrating further with Australia is mixed. It will make a marginal difference to NZ's competitiveness, but at the same time it will make it easier for NZ'ers to go overseas to capture some of that income disparity. Of course they can always come back to NZ in around 12 years time (to retire) when the currency bottoms against the AUD. The big difference for NZ will come from access to Australia's capital markets. Already the countries are talking about integrating their respective legal systems. This will make it easier for the countries to jointly regulate and administer business. This will make it easier for Australians to buy property in NZ, and it will make it easier for NZ'ers to invest in Australia, giving them access to a broader variety of investment opportunities. The appealing aspect of this is access to mining investment opportunities, and probably technology investments, as well as helping NZ technologists to finance their developments given the lack of savings in this country. This will of course aid NZ financial literacy....which has already been favourably impacted in Australia by compulsory superannuation, and most particularly a plethora of privatisations there. In NZ, the bulk of the funding for privatised assets was offshore.

Thursday, September 16, 2010

Political transformation could aid property in Japan

The spectre of a political revolution in Japan might occur sooner than you think. Political crises have always been a strong factor driving reform. Most often change occurs because of crises. Things get to a point when something has to give. Maybe it was the national debt – currently in excess of 200% of GDP. Yes, I know, its owed to Japanese people, but it either has to be paid by taxation, immigrants or currency debasement.
In recent times, we have also pointed to the prospect of political change driving political reform. We see evidence that this is already happening.
Osaka Governor Toru Hashimoto has established a new party One Osaka comprising 82 candidates, among them 40 former LDP members, who will contest the local elections next spring 2011. The Japan Times is comparing the development with the “Meiji Restoration's abolition of the feudal clan system and the establishment of the prefectural system”, and rightly so. It conveys a mass realignment of political interests.
The Osaka LDP chapter has taken steps to expel the 40 LDP members from the party in a bid to stem the tide of party defections. The reality is that any sign of popularity for this party is going to result in even more defections. We might ask however – is Hashimoto such an inspiring leader? What can he do if he becomes PM, given that his supporters might comprise the old members of the LDP? Isn’t it just the same? Perhaps the difference will be the amalgamation of all pro-reform members in the parliament. So what will unite them other than rhetoric? Is there any basis for consensus? It’s hard to say. But change can’t hurt. We will have to watch to see whether there are further defections on a national-scale. Already there is talk of a coalition between Hashimoto’s One Osaka Party and Your Party, which holds 10 seats in the Upper House and shares a number of policies. Expanding the coalition prior to next spring's local elections and the 2013 Lower House election is likely envisaged.
Hashimoto established One Osaka to unite support for his fiscal and bureaucratic reform plans to integrate Osaka City with Osaka Prefecture to form a ‘united’ Kansai state. Unfortunately the party’s plans seem to focus upon public works projects in order to facilitate more trade. This policy platform strikes one as more of the same.
The question is whether these former LDP members will form a national government in the future with the LDP, or will they end up forming a coalition with the DPJ? Probably the former with new, hopefully inspiring leadership, but I see no evidence of that. It looks like change for change's sake.
Of course these developments are important because they could give support for Japanese property investments.

Saturday, September 11, 2010

Earthquakes - Lessons for property buyers

In our latest Japanese foreclosed property report we have added a great deal of information to assist you to avoid the damages caused by earthquakes. Japan is amongst the most unstable or active in the world, alongside places like Papua New Guinea and Indonesia. We also have a NZ property report, and since there was a recent serious earthquake in NZ, we thought we would offer some general public information to assist property buyers. I have some understanding on this issue since I studied geology and geophysics at university in Sydney.

There are some basic issues to understand:
1. Earthquake risks are not always understood because fault lines are not always know. This is because modern human records cover a far shorter period of time than geological processes. Active or previously 'inactive' fault zones can be concealed by recent sediment cover. This is true of the Kanto plain, as well as the Canterbury Plains of NZ.
2. Earthquakes can be zones of weakness, and perhaps not just a single plane of weakness. It might be better to consider them 'crimple zones'. They comprise jagged lines of weakness with zones of intense distortion as well as zones of dilation, where stresses vary from weak to intense depending on the competency of the rocks involved.
3. Earthquake risks are not equal for different regions. Competent basement or foundation rock provides greater security than loosely consolidated sediments. For this reason, thick piles of sediment pose greater risk
4. Unconsolidated sediments pose particular concerns where they are water-saturated, i.e. In areas of high rainfall or low-lying areas. In these cases, sentiments in the 'crimple zones' can undergo liquefaction, in which case they lose all strength and behave like a liquid. This can result in the foundations of your house sinking into the soil in the earthquake zone.
5. An earthquake zone can be a broadly-defined, as is required to relieve the stress. i.e. It is common for a transform fault like in NZ to involve multiple faults, with the outer faults defining the fault zone.
6. Those regions which were historically active for earthquakes might not adequately define zones of future vulnerability. For the reasons already mentioned, old zones of faulting might be concealed by extensive flood plains, as was the case with the Christchurch earthquakes in Sept 2010.
7. A serious earthquake can result in a large number of houses being heaved off their foundations, which are contorted by the ground movement. The houses can sink into the soil, and its common for any brittle structures to crack and fall into the house, i.e. In Christchurch, most brick houses in the fault zone were destroyed as they crack up. Chimneys made of brick often toppled into the structure, posing a risk to residents. Most of these houses need to be demolished and newly built, even if they look fine from the outside. The door hinges might not work properly because of the distortion, just as your car hinges can be poorly aligned after a car crash.
8. Different countries have differing levels of preparedness for coping with earthquakes. Japan is far better in this respect than NZ. Avoid brick homes in NZ, even though they have increased in popularity. The old weatherboard and modern galvanised sheet homes probably make the most sense. Houses on concrete pilings (i.e. posts) rather than concrete slabs make the most sense, though that ultimately depends on the thickness of the foundation, the size of the slab, the competency of the host rock, and the saturation of any unconsolidated sediments. Avoid low-lying areas with unconsolidated sediment foundation.

In the Japan report, I offer a map showing regions of vulnerability to earthquakes based on the Japanese governments analysis. For NZ, there is a transform fault going up the centre of the South Island, and up through Wellington to Hawkes Bay on the North Island. The Taupo Volcanic Zone has not historically been an area of intense earthquake activity, though it is active as well, since that zone is spreading apart at 10cm per year. There is a fault going down to Wanganui City (population 40,000). This region experienced a 5.1 earthquake in Aug 2010.

Table of contents for 2010 property reports

For interested persons, we have moved our table of contents for our 3 latest eBooks pertaining to:
1. Japanese foreclosed properties - looking at the court-administered foreclosed market primarily as this is where the big opportunities can be found at huge discounts to private sales.
2. Philippines property - foreclosed and more typical counterparty deals
3. New Zealand Property - normal industry trade sales. Foreclosed properties are handled through the normal market mechanisms.

Wednesday, September 8, 2010

Advice for Japanese savers

The Japanese Yen is close to a record high point. This is not likely to be sustained because of the need to maintain Japan's export competitiveness as well as the need for the Japanese government to finance its current domestic debt. I therefore advice Japanese investors to place some of the Japanese savings in foreign assets in order to protect themselves from a future currency debasement.
The question is where?
I would suggest several attractive destinations:
1. High yielding Philippine property. It offers yields of 8%, it is close enough to enjoy as a holiday house, its a booming economy with strong population growth. We have a report in English.
2. United State foreclosed property for future capital and yield growth, but also immediate currency protection, and the prospect of holidaying.
3. Mining stocks in the USA - such as gold and copper stocks. See gold price

Please excuse my Japanese (Google) translation:
3。アメリカの鉱業株 - 金と銅の株式など。See gold price

Property investment - USA or Japan?

Anyone noticed how the Japanese Yen is close to its previous highs. I am sure I have wrote about this before, however it kind of defeats the idea of foreigners who are non-residents investing in Japan. Anyway you can check out the price action on Google Finance. There are few currencies which are performing as well as the yen. In fact I could not find one. I was expecting the AUD to hold its own, but its about where it was 5 years ago.
The implication is that it only makes sense to buy property in Japan if you are planning to live here for a while, and you will otherwise be paying high rental yields. Even then, I think if I was a US citizen living in Japan, I would be sending my money to the USA and buying foreclosed properties or gold/copper/tantalum stocks, and perhaps a few other strategic metals. There are two reasons:
1. The very low USD compared to the yen
2. The depressed property market, which must be close to a bottom.
3. Metals are denominated in USD so benefit as the USD falls
4. The US will benefit from immigration and recover quickly, whereas Japan will be a slow process
5. The Yen is destined for the same debasement as the Euro and USD. Why? Because the govt has to repay a lot of debt to the people. It does not have the courage to raise taxes when demand is so weak, and for the same reason, it is not going to be cutting spending so much. It has no choice but to print money. That equals debasement given that the debt is 200% of GDP. Yes, I know its owed to Japanese. But last time I looked, Japanese investors expected interest, and they don't like to be taxed.

If you are looking for a protracted US recession of the type experienced in the 1930s, think again, it will not be as bad for a number of reasons:
1. There is no huge over-capacity in the world
2. The central banks back in the old days made a lot of mistakes, so the commercial banks lost a lot of credibility. There has consequently been no run on the banks like in decades past. Too soon to say? I don't think so. Most are adequately capitalised, and they are backed by paper money. Worthless? Yep, but so are all the paper currencies, and that is why I'd go for gold for protection against debasement.
3. The global story is not as bad as indicated for several reasons - (a) The trade liberalisation of China, India, Latin America, Africa has resulted in an escalation of commercial activity on an unprecedented level. This is reminiscent of the sugar, coffee, cotton booms of centuries past. We are having the same technological boom, but on so many levels, i.e. Miniaturisation of products, high strength steel alloys, outsourcing to Asia, the internet, voice over the internet (i.e. less travel), work from home. There is more coming in energy saving technologies and solar cells, new steel making technologies like HIsmelt.

If you must buy property in Japan, and we like to help, I'd confine myself to a lifestyle home in the countryside. You can avail of the Japan Rail Pass and travel around the country on a tourist visa from your new-found home base. That is what I do. A $300 gets me a week on Japan trains. I have the odd night out on the far-reaches of the country, but otherwise I return home. i.e. Get up early to get to Shibuya by 6AM. Shinkansen to Yokoyama, overland train to Tottori or such places, staying at some lodge, drinking in some small bar with weird people, then next overland train along some great canoeing/kayaking rivers. Its actually amazing how much forested wilderness Japan has.....if only the Japanese people could afford to see it. But you can with a Japan Rail Pass!

Saturday, August 28, 2010

Talk of BOJ weakening the yen

Almost on cue the Japanese government is calling on the Bank of Japan to ease monetary policy. Such pronouncements of course provide support for the Yen, but rest assured there will probably be a crisis of some form to get the yen to 81Y support.
See the full story at Japan Times.

Philippines property - contrarian investment

Property investors beware. You are about to be introduced to one of the best opportunities to buy property you will ever have. The Philippines has long been the 'dislexic' tiger of Asia. It always had a lot of promise, but it could never overcome the legacy of corruption and inept administration. There is perhaps ever reason to think that a solution is not far off, but it will be another 6-8 year. In the meantime, there is every reason to think that the economy will perform ok.
There is good reason to think you will get a great opportunity to buy property there. The reasons are explained in this post I wrote about the current president Noy Noy Aquino. I believe there is very good reason to expect a 'Thai style' military coup. This is of course the time to research, to set up your bank account, and to be ready to transfer funds. During the last crisis - the Asian Currency Crisis - a large amount of money was made and lost.

The implications are that you will never get a better chance to buy property in the Philippines. Any such military-police takeover of government will result in the Philippine peso plummeting to new lows. Check out the currency here, whilst I have indicated support levels on the following chart.
This is the time to be a contrarian investor - both for foreigners and Filipino expatriates. The Philippines is a good long term story. The population is growing at 2% per annum, the economy benefits from a lot of remittances from expatriates abroad, it is the focal point for outsourcing of Western businesses professional services like call centres, etc. The benefits will not be confined to Manila. It is also just a 'stones throw' from China, so expect a lot of tourism, investment when China becomes overheated. The Philippines already has a large Chinese community.
We have written a Philippine Real Estate Guide (2 eBook set) which describes the opportunities in the Philippines property market.

Tuesday, August 24, 2010

Premium NZ property anyone?

Harcourts NZ, the local property brokers, have flown company representatives over to China and Hong Kong in order to sell a package of high-end NZ properties. NZ is of course an appealing market because of its idyllic natural environment, however given the small size of the local economy, during an economic squeeze like the current recession, it is often difficult to find buyers.
Prospective buyers will need to contend with the local foreign investment restrictions. Among the properties available for purchase are:
1. Private islands
2. Agricultural properties
3. High end residential apartments

Prospective buyers might be interested in our report on the NZ property market.

Sunday, August 22, 2010

Should you buy property in Japan?

Now is not a bad time for Australians or Canadians to buy property in Japan, but Americans ought to be sending their money the other way. Consider my latest blog post in my Forex blog. The USD is narrowing the gap with its lowest exchange rate for the yen ever. I don't expect the Yen to breach this level by much. There are 2 reasons:
1. The Japanese government has their own deficit to finance, as well as wanting to stabilise deflation in the country. For this reason I expect the Japanese government to resort to printing money in order to stimulate the economy. This might be performed by offering greater welfare. Certainly the Democratic Party of Japan is the party to implement such a policy. This will of course stimulate some domestic spending.
2. The other reason is the uncompetitiveness of Japanese exporters. This is not a desirable quality, though perhaps there is no hurry, since global demand is pretty weak.

The US presents a far better prospect for investment at this time, and the prospect of the USD falling to 81.86 yen over the next few weeks provides you with the best opportunity to shift your money. This is easily said if you hold Japanese equities, but a little harder if you are holding Japanese property.
Of course the fact remains that if you are living in Japan, you need to live somewhere, and if you are planning to spend a long time there, you may as well buy a place there. But I would only buy if you are planning to buy in the outer suburbs (with are cheaper). I would not be buying into any growth boom. But the very high yield of 12% does make buying more sensible than renting. Of course since is Japanese low interest rates you are using, there is some scope to leverage your investment in Japanese property. Rest assured that Japanese (and indeed international) interest rates are going to remain subdued.

Tuesday, August 17, 2010

Australian property - Morgan Stanley misguided

I am going to weigh into the Australian property debate. The issue was sparked by an academic Steven Keen, who was unsurprisingly proven wrong with assertions of a dire collapse in Australian property prices. Its just not going to happen. Now there is a guy from Morgan Stanley saying there will be a slow decline in Australian property prices. I care to differ. The reasons are the following:
1. Interest rates in Australia will not rise, the Australia dollar will go up. Is that a concern? No, because I think commodity prices will be buoyant, and the govt would prefer commodity producers to suffer rather than homeowners.
Sydney, CBD, 2009
2. There is a raft of huge energy, iron ore, coal, coal seam gas projects to be developed in Australia, each spelling a huge amount of investment in the country
3. There will be a raft of Chinese and Indian investment in these projects over the next 2-3 decades, and that will free up Australian equity to fund all manner of investments and consumption, not to mention tax receipts.
4. There is still strong (i.e. bent up) demand for first homes and home upgrades, and that will continue
5. Neither government is going to allow land releases to severely undermine urban land prices. I see utterly no discussion on land zoning.
6. Mineral exports will increase over this period because of strong demand from China and India. China is not going to stop spending. It is finding even more reasons to invest. It now has to produce a lot of its own iron ore because Australia, Brazil and India are playing hard ball. So they will need new steel mills, new power stations, new railways, etc.
Mosman - Lower North Shore, Sydney, NSW

We are in the midst of an economic era which will never be seen again. There is really no historical precedent for the period we are currently passing through, and it will not be repeated again on this scale. You have half the world's population undergoing liberalisation, at a time when population growth rates can only fall, so the stimulus is never going to be greater from population growth. Even if governments ceased to be centrally controlled, and reason was the standard of value, it is doubtful that the current wealth production would be achieved because of the reliance on consumption by politicians (i.e. Because they undermine productivity through their very existence).

For this reason, I don't see a collapse in Australian property prices, or even a slow leak. I see a government which will be looking to achieve a sideways movement in property prices in order to allow household debt levels to come down. If they spark a property bubble by preventing interest rate increases, they will leave voters with no one to blame in an uncertain international climate. They will be able to do this because employment, immigration and capital inflows will sustain economic activity and per capita incomes.

There are however some caveats to this:
1. If the Liberals win government, they plan to cut immigration so this can be expected to reduce demand for property. I don't think this will have too much difference.

Friday, August 13, 2010

Buying foreclosed property in Japan

It has been a while since we described the opportunities to buy foreclosed property in Japan. The lowest priced properties are of course in the rural areas. For example, in order to impress upon you the opportunities, I did a random search of properties on the http://bit.sikkou.jp website.
You will need to use a translating tool like Google because the website is in Japanese. Court documents are in Japanese as well. I am used to dealing with these documents because they are in a standard format. Maybe you can find a Japanese student if you need help. Pictures convey a thousand words, and the court gives you 10-20 photos. They are very fair minded, with an attention to detail.
I chose one of the cheaper rural areas on the more populated East Coast, close to Osaka City. The region is Wakayama. It is a Y2.1mil ($US22,000) two-storey house, basically $10K for the house, $10K for the land. Some houses have been trashed. This place is untidy, has some 'collateral damage' from the alcoholic who is currently residing in it. How do I know? Well there are crates of alcoholic bottles sitting outside the premises, and at the time the house was photographed, there was still someone living there. If you visit you can find out if he is still living there. Talk to the neighbours. The property detail inside also suggests atypical damage and regard for the property, but really such issues are cosmetic given the price you would be paying. Structurally, the building is probably find. You will likely go there to confirm. You have a period of time during which the courts will help you evict the previous owner. That is of course assuming its a problem. Most leave of their own free accord. If they don't most people simply pay them off rather than go to court. There is a process whereby you can pay the court to store their possessions, but since the evictee needs money rather than a court drama, most simply leave with your cash incentive. Better not to deal with drunks with a chip on their shoulder. How do you know? Talk to the neighbours, establish if they have moved out already. Fortunately, the courts photos give you a great deal of info on the tenants/owners, and they are very fair in their property description. Remember, in Japan you are dealing with the court system, not some agent with a vested interest. This $US21,000 house is 102m2, so its typical Japanese/European size. The land size is going to be small, but if its a holiday house, I think most of us would be happy with a 'crap hole' if you are only paying $21K. Land rates on this property are probably $300 per year, given the location and age of the house, and given the small investment, you would not even bother insuring it.
These types of places are great if you are free to work from home and travel, like being a programmer or graphic designer. In Japan you can get pre-paid internet modems, and no place is too far from the shops. A scooter is another great accessory to get around, or because of great infrastructure, even a bicycle is enough. What more do you need? You need to look at more properties. I use the hyperdia.com tool to find train stations to locate a property, then the map provided to find the specific address. I use Google Maps to look around the vicinity of the property, both the street and satellite view. Train lines are important. Make sure you are buying land, as opposed to buying a house with a lease of land.
All the best with your search!

Major cities of Japan

資料:各都市の推計人口(ホームページ) Japan's major cities:
札幌市 Sapporo 仙台市 Sendai さいたま市 Saitama 千葉市 Chiba
東京都区部 Tokyo-23 横浜市 Yokohama 川崎市 Kawasaki 新潟市 Niigata 静岡市 Shizuoka 浜松市 Hamamatsu 名古屋市 Nagoya 京都市 Kyoto 大阪市 Osaka 堺市 Sakai 神戸市 Kobe 広島市 Hiroshima 北九州市 Kitakyushu 福岡市 Fukuoka

Cities and towns of Tokyo

競売物件購入 keibai buttsuken kounyu 千代田区 Chiyoda-ku 八王子市 Hachioji-shi 羽村市 Hamura-shi 中央区 Chuo-ku 立川市 Tachikawa-shi あきる野市 Akiruno-shi 港区 Minato-ku 武蔵野市 Musashino-shi 西東京市 Nishitokyo-shi 新宿区 Shinjuku-ku 三鷹市 Mitaka-shi 文京区 Bunkyo-ku 青梅市 Ome-shi 郡部 Towns and villages 台東区 Taito-ku 府中市 Fuchu-shi 瑞穂町 Mizuho-machi
墨田区 Sumida-ku 昭島市 Akishima-shi 日の出町 Hinode-machi 江東区 Koto-ku 調布市 Chofu-shi 檜原村 Hinohara-mura 品川区 Shinagawa-ku 町田市 Machida-shi 奥多摩町 Okutama-machi 目黒区 Meguro-ku 小金井市 Koganei-shi 大田区 Ota-ku 小平市 Kodaira-shi 島部 Islands 世田谷区 Setagaya-ku 日野市 Hino-shi 大島町 Oshima-machi 渋谷区 Shibuya-ku 東村山市 Higashimurayama-shi 利島村 Toshima-mura
中野区 Nakano-ku 国分寺市 Kokubunji-shi 新島村 Niijima-mura 杉並区 Suginami-ku 国立市 Kunitachi-shi 神津島村 Kouzushima-mura 豊島区 Toshima-ku 福生市 Fussa-shi 三宅村 Miyake-mura 北区 Kita-ku 狛江市 Komae-shi 御蔵島村 Mikurajima-mura 荒川区 Arakawa-ku 東大和市 Higashiyamato-shi 八丈町 Hachijo-machi 板橋区 Itabashi-ku 清瀬市 Kiyose-shi 青ケ島村 Aogashima-mura 練馬区 Nerima-ku 東久留米市 Higashikurume-shi 小笠原村 Ogasawara-mura 足立区 Adachi-ku 武蔵村山市 Musashimurayama-shi 葛飾区 Katsushika-ku 多摩市 Tama-shi 江戸川区 Edogawa-ku 稲城市 Inagi-shi

Cities & Towns of Saitama

競売物件購入 keibai buttsuken kounyu 西区 Nishi-ku 北区 Kita-ku 大宮区 Omiya-ku 見沼区 Minuma-ku 中央区 Chuo-ku 桜区 Sakura-ku 浦和区 Urawa-ku 南区 Minami-ku 緑区 Midori-ku Cities (-shi) さいたま市 Saitama-shi 川越市 Kawagoe-shi 熊谷市 Kumagaya-shi 川口市 Kawaguchi-shi 行田市 Gyoda-shi 秩父市 Chichibu-shi 所沢市 Tokorozawa-shi 飯能市 Hanno-shi 加須市 Kazo-shi 本庄市 Honjo-shi 東松山市 Higashi-Matsuyama-shi 岩槻市 Iwatski-shi 春日部市 Kasukabe-shi 狭山市 Sayama-shi 羽生市 Hanyu-shi 鴻巣市 Kounosu-shi 深谷市 Fukaya-shi 上尾市 Ageo-shi 草加市 Souka-shi 越谷市 Koshigaya-shi 蕨 市 Warabi-shi 戸田市 Toda-shi 入間市 Iruma-shi 鳩ケ谷市 Hatogaya-shi 朝霞市 Asaka-shi 志木市 Shiki-shi 和光市 Wako-shi 新座市 Niiza-shi 桶川市 Okegawa-shi 久喜市 Kuki-shi 北本市 Kitamoto-shi 八潮市 Yasio-shi 富士見市 Fujimi-shi 上福岡市 Kami-fukuoka-shi 三郷市 Misato-shi 蓮田市 Hasuda-shi 坂戸市 Sakado-shi 幸手市 Satte-shi 鶴ケ島市 Tsurogashima-shi 日高市 Hidaka-shi 吉川市 Yoshikawa-shi 北足立郡 Districts (-gun) 伊奈町 Ina-machi or ko 吹上町 Fukiage-machi 大井町 Oi-machi 三芳町 Miyoshi-machi 毛呂山町 Moroyama-machi 越生町 Ogose-machi 名栗村 Naguri-mura

Cities &Towns of Kanagawa

競売物件購入 keibai buttsuken kounyu 県計 市部計 郡部計 横浜市 鶴見区 神奈川区 西区 中区 南区 港南区 保土ヶ谷区 旭区 磯子区 金沢区 港北区 緑区 青葉区 都筑区 戸塚区 栄区 泉区 瀬谷区 川崎市 川崎区 幸区 中原区 高津区 宮前区 多摩区 麻生区 横須賀市 平塚市 鎌倉市 藤沢市 小田原市 茅ヶ崎市 逗子市 相模原市 三浦市 秦野市 厚木市 大和市 伊勢原市 海老名市 座間市 南足柄市 綾瀬市 三浦郡葉山町 高座郡寒川町 中郡 大磯町 二宮町 足柄上郡 中井町 大井町 松田町 山北町 開成町 足柄下郡 箱根町 真鶴町 湯河原町 愛甲郡 愛川町 清川村

Cities & Towns of Chiba

競売物件購入 keibai buttsuken kounyu 県計 市計 郡計 千葉市 中央区 花見川区 稲毛区 若葉区 緑区 美浜区 銚子市 市川市 船橋市 館山市 木更津市 松戸市 野田市 佐原市 茂原市 成田市 佐倉市 東金市 八日市場市 旭市 習志野市 柏市 勝浦市 市原市 流山市 八千代市 我孫子市 鴨川市 鎌ヶ谷市 君津市 富津市 浦安市 四街道市 袖ケ浦市 八街市 印西市 白井市 富里市

Cities & Towns of Osaka

競売物件購入 keibai buttsuken kounyu 総 数 府 保 健 所 計 池 田 池田市 豊能町  箕面市  能勢町  豊中豊中市  吹 田 吹田市 茨木摂津市  茨木市 島本町 枚方枚方市  寝屋川 寝屋川市 守口 守口市  門真市 四條畷 四條畷市 交野市  大東市 八 尾 八尾市  柏原市  藤井寺 松原市  羽曳野市 藤井寺市 富田林 大阪狭山市 富田林市 河内長野市 河南町  太子町  千早赤阪村 和泉和泉市  泉大津市 高石市  忠岡町  岸和田 岸和田市 貝塚市  泉佐野 泉佐野市 熊取町 田尻町  泉南市  阪南市  岬町 大 阪 市 堺市 高槻市 東大阪市  

Cities & Towns of Hiroshima

競売物件購入 keibai buttsuken kounyu 県計 広島市 広島市中区 広島市東区 広島市南区 広島市西区 広島市安佐南区 広島市安佐北区 広島市安芸区 広島市佐伯区 呉市 竹原市 三原市 尾道市 福山市 府中市 三次市 庄原市 大竹市 東広島市 廿日市市 安芸高田市 江田島市 府中町 海田町 熊野町 坂町 安芸太田町 北広島町 大崎上島町 世羅町 神石高原町