Weak Yen Pushes Land Prices Up

Behind a jump in metropolitan land prices reported by the National Tax Agency on July 1 is increased investment by foreigners, pushed by a weak yen.

Whether the rise in land prices will continue, however, is unclear, with many predicting that land prices will peak after one to two years.

Five minutes by foot from JR Meguro Station in Tokyo is Meguro Gajoen, a facility that includes hotel, wedding and office space, and is the location of Amazon Japan’s headquarters. In August last year, this facility was obtained by Mori Trust Co., before being sold in January this year to an American fund that has a Chinese government-linked fund as one of its investors. The amount of money exchanged has not been publically released, but it is believed that Mori Trust bought the facility for around 130 billion yen and sold it for over 140 billion yen, showing a rise in price of over 10 billion yen in less than half a year.

According to NLI Research Institute, the amount of money paid to buy real estate in Japan by foreigners in 2014 was around 900 billion yen, around 30 percent more than in the previous year. Foreigners accounted for around 20 percent of real estate purchases of one billion yen or more.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza