Transcription
The Japanese people can't stand it anymore. The biggest target is directly aimed at foreigners. Waking up one morning, they found the building they lived in had been bought by foreigners. A notice directly stated that the rent would increase by 2.5 times. Are the Japanese going to become slaves to foreign capital? The hard-earned money from their labor can only be handed over to the invading real estate colonial empire. In this episode, we will quickly review:
One, recent real estate events that have shocked all of Japan.
Two, interpreting the increase in capital region real estate prices in the post-pandemic era through the latest data.
Three, and most importantly, how these changes will affect the Japanese government. After the ruling party's major defeat in the Senate elections, will the purchase of Japanese real estate by foreigners be tightened? For friends considering purchasing property in Japan or who already own property in Japan, this episode is a must-watch. For Japanese friends who want to understand Japan more deeply and are interested in Japanese society and culture, this episode is highly recommended. To avoid missing out in the future, we suggest liking and saving it first.
The "Itabashi Incident" not only shook all of Japan but was also directly discussed in the Japanese Diet, even leading to the ruling party's electoral defeat. The entire incident was full of twists and turns. Taiwanese media and YouTubers also reported on the incident at the beginning, but the parts that Taiwanese media almost completely failed to follow up on were the truly exciting turning points. Let's quickly outline the background and key points of the incident. Itabashi Ward is located in the northwest of Tokyo. It takes about 30-40 minutes by train to Shinjuku. Unlike the bustling city center of Tokyo with its skyscrapers and noise, Itabashi Ward is quiet, boasts rich natural landscapes, and convenient living functions, attracting many Japanese people who seek cost-effective living conditions.
Wait, speaking of this, it sounds like a mystery case. No, it's not. In January of this year, a notice disrupted the peaceful lives of the original residents. Residents of a certain elevator building received a "Notice of Rent Increase." A 30-square-meter room, about 9 ping of interior space, is about the same size as the room I rented in Gotanda when I first started working in Tokyo. The layout is usually 1K. Coming in from the hallway, passing the toilet, bathroom, and kitchen, a room is separated by a door. There's also a small balcony for drying clothes. For a single person, it's quite comfortable in Tokyo. This resident in Itabashi Ward originally paid a monthly rent of 72,500 yen, which is about 14,500 Taiwan dollars at the current exchange rate. Considering that Itabashi Ward is originally a place that pursues a high-quality living environment and high cost-performance, this condition should be considered market price. However, this notice clearly stated that 72,500 yen would only be valid until July 31st. From August 1st, the rent would skyrocket to 190,000 yen, an increase of more than 2.6 times. Everyone has experience in society; this increase is obvious to anyone with eyes – it's forcing you to leave! But the residents were confused. After investigating, they found out that the entire building had been bought by a buyer from Liaoning Province, China. You might say that even if ownership changes, why force the residents to leave? Originally, the residents lived there, paying stable rent, and cash kept rolling in. Isn't that appealing? As the residents discussed, they connected these two events. In recent months, many tourists with large suitcases, speaking loudly in Chinese, have appeared in the building. On the reservation website, there were also introductions to this building as a guesthouse. Yes, a guesthouse. So, it turns out that operating a guesthouse is more profitable, and they are forcing the original residents to leave! Of course, there's nothing wrong with operating a guesthouse. Within the bounds of the law, it's the owner's right to choose! Ha, everyone, don't rush. The reversal is coming soon. This matter blew up. The Itabashi Ward government investigated and found that this building had no guesthouse registration at all. Wow! What's even more unacceptable is that the landlord directly sealed off the elevator, using a very nice reason: the elevator was broken and needed repair, but the repair materials would take more time to gather. Strangely, the elevator was working perfectly yesterday, but it's unusable today. Do you believe that? This 70-something-year-old Japanese grandmother living on the 7th floor climbed the emergency stairs step by step. Every step was a torment to her knees, like a humiliation to her life. Japanese news media ANN interviewed the owner registered in Liaoning Province by phone. The entire interview was in Chinese, so we didn't even need a translator. This gentleman from Liaoning said, "Hey, everyone, listen carefully. It's really amazing. I don't live in Japan long-term. Originally, long-term investments might be more in places like Hong Kong. In these places, because our rent has increased by about 2.5 times, this is normal. Because I want to renovate the house and provide a better environment for the residents." Hey, is it appropriate for you, a person from Liaoning, to speak on behalf of Hong Kong? Friends in Hong Kong, or friends who know Hong Kong, please comment. Is what he said true? Let's take a step back. Itabashi Ward is not a prime location in a bustling international financial city like Hong Kong. Japanese law also does not allow you to raise rent as much as you want. Previous videos on the channel have also mentioned that the spirit of the "Land Lease and House Lease Act" in Japan is to protect the rights of residents. A landlord unilaterally wanting to increase rent is not permitted by law. The landlord can propose a rent increase, but it must be within the legally designated timeframe, and even a mere 1,000 yen increase requires the mutual agreement of both the tenant and the landlord. In cases like the Itabashi incident, if the tenant does not agree to the landlord's rent increase, the legal process in Japan is that the landlord must file a lawsuit. In court, they must prove why the increase is reasonable with extensive evidence and data, such as rents of similar properties in the vicinity, operating costs, etc. However, an increase of 2.6 times at once is something that no lawyer with extensive practical experience in Japan would believe could be established in court. It's completely chaotic and nonsensical. The key is that after hearing this, the exciting part of the story is just beginning. The Itabashi incident directly ignited the anger in the hearts of the Japanese people. Opposition party Diet members directly questioned the Japanese Prime Minister in the Diet. This bizarre case was also extensively reported by Japanese news media, making it virtually known to everyone in Japan. Finally, the Liaoning landlord realized that things were getting serious. The day after the Diet questioning, the tenants received a notice: all previous rent increase proposals were withdrawn, and miraculously, the elevator was repaired. However, the matter is not over. With the entire incident attracting so much attention, the owner is still causing trouble. The cleaning service for the common areas of the entire elevator building suddenly stopped. The elevator, which was once usable, had its inspection permit expire in June, and the company was not asked to inspect and renew it. The building's garbage collection service also stopped. The entire building is in a state of dysfunction, but the residents continue to pay rent and management fees. They are paying for nothing! Finally, some tenants couldn't take it anymore and started moving out of this nightmarish home. However, some tenants persisted and filed a class-action lawsuit, determined to fight for justice. The Itabashi incident shocked Japan, especially the residents of the capital region who have been suffering from the rocket-like rise in housing prices in recent years. Japanese society has unanimously turned its guns on foreign investors, which also led to the ruling party's major defeat in the Senate elections. We will explain this shortly, but before that, guess who would be the most angry, hateful, and troubled person in this entire incident? Yes, it's Chinese friends living in Japan, and also Chinese investors who want to honestly do rental business and guesthouse business. Including the Itabashi incident and the Yotei-zan incident in Hokkaido, these Chinese investors have ignited the anger of Japanese society. In fact, Chinese people who want to abide by the rules of the game have indeed suffered collateral damage. The impression of Chinese people in Japanese society has worsened, and various regulations and systems have become stricter, affecting Chinese people who want to live normally and invest and do business. Therefore, when we talk about tightening Japanese policies on foreign investment later, the first people to applaud will be these Chinese people who want to do business properly. As you can see from this chart on the screen, the red line represents the latest prices of 70-square-meter properties in Tokyo's 23 wards released by Tokyo Kantei, a real estate data and appraisal company. 70 square meters is about 21 ping of interior space, which is easier to understand in Taiwan. In Japan, this usually translates to a 3LDK layout, which is a common type of housing purchased by families with children. This chart shows that in 2020, the price of a 70-square-meter used property in Tokyo's 23 wards was still over 50 million yen, but in May of this year, it directly exceeded 100 million yen. It has doubled in the past 5 years. At the current Taiwan dollar exchange rate, it's about 20 million Taiwan dollars. In Taipei, this might not seem expensive, but what is the feeling for Tokyoites? Let me share a personal experience. In 2020, I was preparing to buy a house, and I was looking at properties frantically in Tokyo. There was a used condominium about a 5-minute walk from Takadanobaba. Takadanobaba is on the Yamanote Line, near Waseda. I remember this 3LDK, which was 66 square meters, was listed at 66 million yen at that time. I considered it for a long time, but I didn't choose it because the distance to the adjacent building was too close. At that time, I thought over 60 million yen was a reasonable price. In the past, buying a condominium for over 100 million yen was jokingly called an "okushon" (million-yen mansion), which only the truly wealthy could afford. But if this property were to come out at that price now, forget about me buying it in a second, the real estate agent would sell everything they own to buy it first; it wouldn't even reach the market. I just checked casually. A 7-minute walk from Takadanobaba, Park City Takadanobaba, a 13-story building. A 7th-floor apartment of 65 square meters, which is about 20 ping. Although it's a new development completed in 2025, and it's by a well-known developer, it's just a regular condominium, not a tower mansion. Guess how much it's listed for? It's listed at 189.5 million yen. Tokyo real estate has truly gone crazy in recent years. Past decades of experience in Tokyo real estate have become like tales of old. "Okushon" has become the basic requirement for buying a home in the city center, no longer a symbol of the nouveau riche. So, if housing prices are rising, have Japanese salaries also increased? Let's get straight to the point: yes, they have increased, definitely increased. But compared to housing prices, it's still a drop in the bucket. I believe many viewers living in Japan can share their experiences on this. Feel free to leave comments. According to the survey results from the Japanese National Tax Agency, the average salary of regular employees from 2014 to 2023, over ten years, increased from 4.89 million to 5.3 million yen, an increase of about 410,000 yen, or about 8%. It has increased, but compared to housing prices and living costs, one can only smile politely. If we break down the average salaries for men and women, those in their early 40s, who buy the most houses, have an average male salary of over 6 million yen and an average female salary of over 3 million yen, making a combined annual income of about 10 million yen. In the previous section, we mentioned that by 2025, the average price of a 70-square-meter used property in Tokyo's 23 wards will exceed 100 million yen. So, a simple calculation shows that it's about 10 times the annual salary. According to the global database Numbeo's housing price-to-income ratio, it's indeed similar. In 2023, Japan's ratio is 10 times. However, Taiwan's is nearly 20 times! The key point is: what impact and restrictions will there be on us foreigners buying houses in Japan in the future? Before that, let's talk about the extent to which foreigners are buying Tokyo real estate so aggressively. The example at the beginning was from Itabashi Ward, but what about other wards? A survey conducted by a major Japanese bank, Mitsubishi UFJ Trust and Banking, in the second half of 2024 among developers in Chiyoda Ward, Minato Ward, and Shibuya Ward revealed astonishing figures: 20% to 40% of building sales properties were bought by foreigners. At least three different sources have told me that in Azabudai Hills, reportedly the most expensive in Japan, with unit prices exceeding 50 million yen per ping, a 3LDK unit costs 3 billion yen – a price I can't even imagine in my lifetime. It is said that over 40% of the buyers are from China. From cheap to expensive, from cost-effective areas to affluent neighborhoods, foreign capital is aggressively entering Japan. Of course, it's not entirely accurate to say that foreign capital is driving up prices. Japanese locals are also buying houses aggressively. This situation has never happened before. In the past, Tokyo real estate was very data-driven, with asking prices generally being transaction prices, and there was little room for price negotiation. But now, especially in Tokyo, real estate has become a seller's market, with sellers arbitrarily setting prices and buyers further negotiating. Such cases are quite common. There's also the saying in Taiwan, "If it doesn't sell, raise the price." Wow, I never expected this to happen in Japan, and I actually encountered it. I saw a property near Asakusabashi in July, which was then priced at 79.9 million yen. But that day, I chatted with a local real estate agent who also recommended this property to me, saying it was cost-effective and had access to two train lines nearby. 84.9 million yen is worth buying. 84.9 million yen? I thought, "Hey, I clearly remember it was 79.9 million yen." I even copied and pasted the SUUMO link to him and asked the agent if the price had been reduced. He was also surprised when he heard it and immediately checked. To my surprise, it was indeed a case of "if it doesn't sell, raise the price." Well, I heard it wasn't that it didn't sell, but rather that after the owner put it up for sale, too many people applied, and they felt they had sold it too cheaply, so the owner directly added 5 million yen, making it 84.9 million yen. By the way, this property was still sold quickly later. In the past, when we lived in Japan, we felt that houses should naturally become cheaper with depreciation. But now, not to mention condominiums, as we've seen the data, prices have risen across the board. Even wooden detached houses have increased in price. Properties that might have cost over 70 million yen to acquire are now being put on the market after five or six years of occupancy for over 80 million yen. To reiterate, this crazy price surge is definitely not solely caused by foreign capital. However, when discussing it, foreigners are a good target because they have indeed caused a displacement effect. And to be frank, foreigners don't have voting rights, so Japanese politicians are not afraid of offending them. Therefore, in the July Senate elections, with public sentiment in their favor, opposition parties strongly criticized the ruling Liberal Democratic Party and Komeito for their lenient policies towards foreigners. In this election, the opposition parties gained 13 seats out of the 125 seats up for re-election, making them the opposition parties with the largest increase. The Democratic Party for the People, advocating for further restrictions on foreign land acquisition, also gained 13 seats. The right-wing emerging party, Sanseito, proposed "Japanese First" in its manifesto, prioritizing Japanese people and viewing overseas investors' acquisition of real estate as a problem, advocating for strict restrictions on foreign real estate purchases.
By the way, even though the LDP and Komeito are relatively free and open towards foreigners, the LDP also included "Zero Illegal Foreigners" in its Senate campaign manifesto. However, it's worth noting that many Japanese people have criticized this, saying, "Of course, illegal activities should have zero tolerance. What does 'zero tolerance for illegal foreigners' mean? Isn't this manifesto redundant?" In short, the election results showed a major defeat for the liberal and open LDP and Komeito, who also lost their majority in the Diet. What kind of regulations might be implemented in the future? This channel has specifically researched various proposals, the direction of opinion leaders, and public opinion. Firstly, directly restricting foreign real estate purchases would likely face the most resistance. It would mostly target certain strategically sensitive military areas for national security reasons, with further restrictions or a special permit system. However, it's unlikely to be implemented on a large scale across the entire country for real estate transactions. Secondly, implementing a vacancy tax also faces significant resistance, as many Japanese people advocate for a dual-city lifestyle. If taxes are increased on second or third properties, it might face pressure from domestic citizens and even affect rural revitalization and the reuse of vacant properties. So, here's the main point of this video: what is more likely to be implemented is a tax adjustment targeting non-resident foreigners, including three types: First, increasing property taxes for foreigners or requiring them to pay property taxes for several future years in advance when acquiring real estate. This would increase the threshold for foreign acquisition and also prevent foreign tax evasion and avoidance. Second, increasing the capital gains tax for foreigners, mainly targeting short-term speculation and arbitrage, by imposing heavy taxes to curb foreign speculation in housing. Third, and what I assess as the highest probability of implementation and is supported by many opinion leaders, is stamp duty for foreigners. Many opinion leaders in Japan cite the example of Singapore, which in 2023 directly increased the stamp duty for foreigners purchasing residential properties from 30% to 60%. This means that for a property worth 100 million yen, an additional 60% of the property price, or 60 million yen, would be paid to the government as stamp duty. After significantly increasing stamp duty, Singapore has indeed effectively curbed the purchasing desire of foreigners and provided breathing room for housing price increases. Moreover, for foreigners, they can still buy if they want to, and for domestic citizens, it helps stabilize housing prices. Finally, the Japanese government also collects tax revenue. This is a win-win-win situation. Therefore, stamp duty is currently the most likely measure to be implemented, reflecting public sentiment. It appears that restrictions targeting foreigners are imminent. For friends who were planning to purchase Japanese real estate, they might need to consider this high probability variable. However, as everyone knows, Japan is very cautious in legislative discussions, so there should still be a window of opportunity. As for whether these restrictions will affect Japanese real estate prices and further lead to a collapse in real estate prices, at least in the capital region, the risk should be very low. Japan's economic performance is strong, it has emerged from long-term deflation, salary increases are comparable to the bubble economy era, and population is heavily concentrated in urban areas. These are strong domestic demands supporting housing prices. Of course, in areas with declining population outside of cities, a different analytical framework must be applied. The overall environment in Japan has changed significantly in recent years, and many past common sense assumptions are constantly being broken. The real estate discussed today, from the Itabashi incident to the "if it doesn't sell, raise the price" phenomenon, to the parties advocating for strong restrictions on foreigners winning seats in the Diet elections. Of course, the benefit is that change often means business opportunities, both for domestic citizens and foreigners. However, it must be emphasized that this channel has always opposed property speculation. Buying and selling real estate should be based on actual needs. For long-term rentals, be a good landlord. Owning real estate should ultimately return to your actual living needs. Do not pursue quick buying and selling or profit from price differences through speculation. We welcome you to share this video with more friends who are interested in Japanese real estate or changes in Japan's political and economic situation. Please support the channel. Friends who have invested in real estate in Japan are also welcome to share your investment experiences. Friends interested in purchasing Japanese real estate are also welcome to leave comments below for exchange. Deeply understand Japan, savor its culture, learn from its strengths, and avoid its weaknesses. Let us use the power of knowledge to change Taiwan.