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.