Transcript A Look at Japan

ASIA/PACIFIC & INTERNATIONAL REAL ESTATE
5. A Look at Japan
Page 85
Slide 5-1
Geography
Page 85
Slide 5-2
Economy and Business
Dependent on imported raw materials and
fossil fuels
Positive trade balance
Unrestricted flow of capital and financial
transactions
Unique to Japanese business—the Keiretsu
Page 87
Slide 5-3
Japan’s National Debt
200 percent of its
GDP
Difficult reckoning in
10–20 years?
Offset by trade
surplus, foreign
currency portfolio
 Aging population
Investor confidence
 Waning export
competitiveness
Page 88
 Shrinking workforce
 Cost of debt service
Slide 5-4
2011 Disaster
Human tragedy
Lost families, homes, and livelihoods
363,000 buildings were completely or
partially destroyed
Damage to infrastructure
Most expensive natural disaster in history
A decade to rebuild
Opposition to nuclear power plants
Page 88
Slide 5-5
Land Lease
Scarcity of land
Many small landholders , small land parcels
Land lease system
Landowner maintains title to the land
Leaseholder receives the right to construct
and occupy a building on it
Page 85
Slide 5-6
Can Foreigners Own Real Estate?
No restrictions or conditions
No government permission or approval
Free flow of capital
May establish a operate a business
But….
Mortgage financing obstacles
Page 90
Slide 5-7
 Home values depreciate
 Sell at deep discounts
 25-year old home has no value
 Most are rebuilt after 25–30
years
 No value in quality
construction
 Japanese favor new
Secondhand
Housing
Page 91
 Previous owner’s bad fortune?
Slide 5-8
Homeownership Trends
Homeownership rate—61%
Small living spaces, condos—45 m2, single
family homes—121 m2
land prices a barometer for new home prices
1 tsubo = two standard tatami mats
(3.3 square meters , 35.5 square feet)
Page 92
Slide 5-9
Rental Property
Pre-landlord, expensive process
5-7 months rent
Key money—thank you for privilege of
renting
Direct transfer of rent payments from the
tenant’s bank account
Foreign Resident Registration Card
Page 93
Slide 5-10
Real Estate Professionals
Real estate business licensing
Sales agent licensing
Commission rates are fixed by the National
Ministry of Land, Infrastructure, and
Transportation
Page 85
Slide 5-11
Office Vacancy Rates
New
Buildings
Existing
Buildings
Page 94
Slide 5-12
Doing Business in Japan
Beyond the Basics
 Names
 Meetings
 Initial Contact and
Introductions
 Demeanor
 Intermediaries
 Negotiations and
Decisions
 Business Relationships
 Social Etiquette
 Business Cards
 A Few Taboos
Page 98-102
Slide 5-13
Amae
Hada to hada
Nemawashi
Tatemae and honne
Building
Relationships
Page 99
Slide 5-14