Originally Posted by
5khours
Let me clarify this as I was trying to be responsive to the OP's question specifically regarding safety...... Absent flagrant and criminal violation of the building codes, there are no earthquake related life safety issues with any buildings being built in Japan.
That is simply not the case so long as all earthquakes are not the same. The minimum building code is good for about a 3 or 4 (on the Japanese scale). But when you get to 5, 6, 7 your get vast differences which very significantly impact life safety. The scale is available online I believe and very few buildings are rated at the top end. Some are so safe however they get extra stars (like the “+” on an A grade sort of thing). This is the reality of buildings here. Assuming legel construction, even then, not all are created equal.
Originally Posted by
5khours
Also I would stick to my earlier statement that economics depend on individual circumstances and specific properties. Personally I'm long and also bullish on central Tokyo, but I think even for central Tokyo you need to take into account other factors including: can the buyer get financing or do they need to pay cash, can the buyer absorb a large short term hit if there is a cyclical downturn, with a brand new building is the buyer willing to accept the above market premium for newly built buildings, what happens if long term trends change, with a premium property can the owner wait a year or more if they need to sell, what's the real opportunity cost of capital (not limiting yourself unrealistically to yen assets.)
OK, let’s look at that. If a person who has enough income to become a home buyer cannot get financing it is likely they do not work in Japan and would buying with cash on purpose. There are various reasons why one would want to pay cash. So if you do not have cash and are not employed to an extent a bank would loan you money, you may want to reconsider buying a home here anyway. The short term hit on a cyclical downturn? In terms of rental income? I assume this is the case as rates are fixed unless you cause them to go down yourself buy paying a large chunk of principal up front. Generally for rental income you look at a 20-30 year span here and there is no evidence on the past few decades of extended downturns. Pretty safe bet that you’ll be fine on that one. Premium’s above market? Go to a different bank. That is not a law nor a requirement. Banks are competitive enough that that such policies are easily avoided. I pay less than 1% and this is a continuing trend. Long term trends of real estate in the central areas will only get better. There is limited supply, increasing demand and a very wealthy country in which these exist. This is not a “what if” academic discussion I thought. Although individual stories may differ, if a person can swing a house in the first place, can live and work here and thus likely get a loan at a super cheap rate, the differences become value choices as opposed to go/ no go choices.