Buying Residential Property in Japan - Interest Rates
Why would you want to?
The second good reason why property in Japan is looking attractive is the end of the Zero Interest Rate Policy (ZIRP). We live in a post-ZIRP world. We do not live in a 5.8% 30-year fixed world, but we no longer live in a 1% floating world either. For a country to keep interest rates close to zero for more than ten years is a massive historical anomaly and interest rates have only one way to go, no matter how often politicians strong-arming the Bank of Japan may delay them. We are now at the ‘You don’t know what you got till it’s gone’ phase, except it hasn’t quite gone. City prices have turned, or a least stopped falling and rates, although headed up, are still low. A 3.1% 30-year fixed mortgage will seem a bargain ten years from now. The boat here is obviously leaving, so that's another reason for buying. Depending on your deal, the financing may be more salient than the out-and-out price of the property. Either way, we are towards the end of the sweet spot of finance and price.
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