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To reply to your latest comments, here and on that other thread –
The problem with Japan is that while you can make the numbers appear good right now going forward they can become extremely poor under what looks like an inevitable devaluation of the yen…If the yen heads to 200 as many are beginning to speculate…
This is the first in a long string of speculations you’ve put forth that are nowhere near a certainty – while I can’t profess to know what will happen to the Yen, Japan’s economy (nor any other country’s) or the price of eggs on Mars, your assumption seems to completely ignore the other global forces in play here. Abe is actually pushing as hard as he can, bending things to just shy of breaking point, to get the Yen to devaluate to around 120, which is his exports-driven goal, but is having quite a hard time of it – so far the US didn’t even have to retaliate with any QE, since their mellow recovery is actually doing the job for them – but they still have room to push if and when this becomes the case – and this doesn’t even touch upon China, Australia or other, closer countries and their respective economies. To say the Yen will go to 200, post-WW2 figures, is a bit of a stretch, to put it mildly, and when put forth with such conviction as you seem to have is mildly perplexing, to say the least.
…the wrong type of inflation…Incomes are declining in real terms and more in inflation adjusted returns which doesn’t support capital values…
Again, you seem to be speculating with great conviction here. Reality, while no where nearly as conclusive as your wishful thinking reasoning, is actually pointing, ever so slightly, in the opposite direction, as latest indicators seem to suggest (and this is just basic wages catching up to the complete package, including overtime and bonuses, which has already been rising for the better part of the last 12 months) –
Bloomberg – Japan Basic Wages Rise for the First Time in 22 Months in Response to Abenomics
…A 14% annual return may look somewhat anemic after 5 years given the current economic picture and that it will take around 13 – 15 months to claw your entry costs back…
Couldn’t quite follow this statement – what economic picture? If you look at the overall picture, and not at a temporary or single-quarterly currency of GDP fluctuation, which the sales tax and other regional issues will always bring about, things actually haven’t been this good since the bubble economy burst in the 1990s –
Market Realist – Japan Business Conditions Haven’t been This Good for a Decade
…As a result of the aggressive monetary and fiscal policies being employed, the Japanese yen has weakened 30% since late 2012 and has made a major contribution to the growth in profitability among Japan’s exporting companies…
the non-manufacturing sector (the green line) has made a significant recovery, outpacing manufacturers on the recovery for the first time since the bubble economy burst in 1990. This points to a fairly broad-based recovery in Japan…
corporate profits have begun to grow rapidly. Plus, the slack production capacity in Japan is out of the danger zone post-2008, and headed back to the 2007 levels. Should this trend continue, we might expect to see fixed investment data, as noted above, move back to the levels seen during the 2002–2006 period of expansion, when the Nikkei stood at 18,000—roughly 30% higher than the Nikkei is today…
the worst is over as far as excess capacity is concerned. Given the current trend, it’s conceivable that capacity levels could reach the levels seen during the recent 2006 peak, pushing the capacity utilization operating ratio back to the 2007 highs as well…
fixed investment recovery in Japan is finally accelerating and supporting growth…fixed investments as a percentage of corporate profits are at post-1998 peak levels, suggesting that there’s plenty of room for more investment…
the willingness of Japanese banks to lend—nearly the best levels we’ve seen since 2007. With ultra low rates, ultra high cash levels, and growing corporate profits in Japan, this data would suggest the growth of a positive environment for Japanese equities…
And it goes on and on…
As for your opinions on the shrinking population and its reflection on the tenant base – for starters, at the moment, there are droves of people moving out of the dying villages and teeny tiny towns, and into capital cities and formerly small towns which are slowly conglomerating into bigger and bigger townships – so even for the short-medium term, there are now far more substantial investment hubs in Japan that have seen population growth in recent years (which is where property investors purchase in the vast majority of cases, unless looking for a mountain or ski slopes holiday home etc) – So not only Tokyo and Osaka, but now Sapporo, Nagoya, Fukuoka, Kumamoto and even smaller, formerly unheard of towns/cities like Kikoochi, Utsunomiya, Fuji city, and others, are now experiencing a growth in population, in sharp contrast to national trends.
As for immigration, you write –
… not only is Japan’s population getting older but it is also contracting. Just to hold their population requires immigration to jump to some crazy figure like 17 million which isn’t going to happen in this lifetime. So buyer demand is progressively falling off a cliff so to speak…
Quite a long cliff to fall off, considering Japan is Asia-Pacific’s biggest property investment market. Not sure where you got your 17 million figure from, but regardless, not only has migration laws gone through two huge overhauls, the latest round of which has introduced skilled migration scheme to the country, but is now also officially considering increasing the number of migrants to around 200,000 a year, which government officials believe will keep the population stable –
Japan Times – Japan may Boost Immigrant Numbers
…The Sankei Shimbun reported Friday that the Abe administration has decided to consider accepting a massive number of immigrants, possibly as many as 200,000 a year, to make up for the rapid aging and shrinking of the Japanese population.
“It is true (the Council on Economic and Fiscal Policy) is now having discussions to promote mid- to long-term development of Japan, with an eye on structural changes such as the shrinking of the population,” Suga, the top government spokesman, said during his daily news conference…
Japan will be able to maintain a population of more than 100 million if it accepts 200,000 immigrants a year and the total fertility rate, a key indicator of a country’s birth trends, recovers to 2.07 by 2030 from the current 1.39…
The other point you forgot to mention – there’s more than one solution to Japan’s shrinking population – one is increased immigration, and yet another is re-enabling family support services, to allow women out of the vicious “Be a housewife or have a life” cycle they’re currently avoiding by remaining single in most cases – one of the major causes for population decline – this is an integral part of Abe’s latest policies as well.
Bottom line – it’s great to speculate, but really, we (and our clients) generally follow the three rules outlined time and time again – 1. Achieve reasonable monthly cashflow in reasonable tenant base localles
2. Don’t invest with money you’ll need back in a hurry (i.e. to pay a mortgage back home or live off, etc)
3. Pad your forex transfers and always leave extras behind, hedge your currencies and investments, and allow ample timeframes for transfersFollow these three, and you’re guaranteed to ride the booms and busts of whichever market you choose to invest in. In fact, you’ll be utilizing the drops just as well (sometimes better) than the hikes. Japan is no different, and anybody’s crystal ball is as good as the next guy’s, really. I have no idea what tomorrow will bring (although I think Abe’s having the best go at improving things that Japan’s seen in decades) – but I position myself (and my clients) to benefit in the long term, and on any dips in the interim, as I’m hoping most people here do.
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This reply was modified 10 years ago by
Ziv Nakajima-Magen.
Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
We actually have a thread on that topic here – I’ll reply to your comments there – but essentially they’re very speculative, Sam (John/Freckle/etc…), to say the least – while I don’t profess to knowing what the future will bring, current indicators are actually pointing in the opposite direction – and certainly there’s not much to justify your doom and gloom prophecies as far as Japan is concerned (I’m a very small expert on other markets).
But, as mentioned, let’s leave that for that other thread – I honestly just wanted to see some other numbers (as skewered as they may be considering whatever the future may bring, which could be anything).
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This reply was modified 10 years ago by Ziv Nakajima-Magen.
Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
Abe's just pandering to the elderly, nationalist vote – no apology will be retracted, but the "venerable historians committee" will pay lip service to those who want it done, that's all. If you really want to see how "racist" Japan is, feast your eyes on this –
J-LEAGUE SHAMES RACIST FANS IN THE MOST AWESOME WAY POSSIBLE
Quote:…J-League unleashed an incredible Zinedine Zedane headbutt-level can of whoopass on all involved in the incident, banning the fans who posted the sign for life, forcing the Reds to play their next game in an empty stadium, and banning Reds team supporters from displaying banners of any kind for the foreseeable future…or this –
RACIST ANTI-KOREAN DEMONSTRATION MEETS 3 to 1 RESISTANCE IN TOKYO
Quote:…Much to the surprise and chagrin of the Zaitokukai, however, they found themselves outnumbered three to one by a huge cluster of counter-protesters holding anti-racist signs and shouting down the right wingers as they marched…go, Japan
Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
And on the other hand, in spite of your apocalyptic predictions to the contrary ("those xenophobic racist bigots will never allow more immigrants, and will all die out!"), Japan has finally introduced a skilled migration scheme (points based migration) similar to Australia's – no quota limits – making it officially easier to migrate to the land of the rising sun than it is to the USA
(and, insider's tip – a lot cheaper and easier than it is to migrate to Australia, too, since outcomes are truly based on case officer discretion, as opposed to automated computerised pass/fail algorithms) –JAPAN, AT LONG LAST, ADOPTS SKILLED MIGRATION POINTS SYSTEM
(Gotta love the cute drawings attached, too
)Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
Yup, tick tick tick alright…good luck with that one
FRESH HARVEST OF WIDOWS IN THE WIDOW-MAKER TRADE
Quote:…investors have called the top in the Japanese bond market for years, only to get impaled”This has been going on for over 20 years now, and yet people have been crushed by the trade over and over again…
"The definition of insanity is to engage in the same activity over and over gain, expecting results to be different this time around", I believe you were saying? By all means, carry on ticking.
Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
Love how you take every positive trend, even if it's a year or seven years long, as "a temporary glitch on the way to my prophecy fulfilment", and every negative glitch as "the sign of the upcoming apocalypse which I've known was coming all along". Reality much?
this is sounding suspiciously like your "Abe's a goner" sing along chorus to the pre-election shananigans. Oops, almost forgot, that prophecy didn't come true either.Here are the news from the two days following your little dance of joy –
BULLS STAND FIRM ON JAPANESE STOCKS
Quote:…fund managers who helped drive a rally in Japanese stocks last year say they are still bullish, citing growth in the world's third largest economy…JAPANESE STOCKS REBOUND ON FALLING YEN, OVERSEAS TRADE
Quote:…The benchmark Nikkei 225 Stock Average gained 307.29 points, or 2.17 per cent, to end at 14,462.41 after falling 0.18 per cent on Thursday.The broader-based Topix index was up 26.77 points, or 2.3 per cent, at 1189.14…
Exporters traded broadly higher as the yen fell against the dollar and the euro. A weaker yen makes Japanese goods more competitive overseas and improves repatriated revenues…
So let's see, the NIKKEI finished 2013 60% up in local currency and 54% up in total – then a month into the new year, it dropped app 6% (mostly following the US as far as timing is concerned), then regained about half of that back. Wow. Almost sounds like a stock market! So what exactly were you trying to say there, that stock markets fluctuate? Hold the press, folks, Freckle's got a news flash again.
This is a property investing forum, man. People here are (mostly) in it for the longer term. Save the chicken little shticks for your gold and silver buddies
Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
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This reply was modified 10 years ago by
(and, insider's tip – a lot cheaper and easier than it is to migrate to Australia, too, since outcomes are truly based on case officer discretion, as opposed to automated computerised pass/fail algorithms) –
