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!
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