I found this very thought provoking article about the housing crash in the SF Bay area. While it may not be completely relevant to buying a house in Japan, some of the arguments about renting vs buying a home are worth pondering. It’s a long article but worth reading right to the end.
Hey Roy,
I’d have to say we’re at a complete opposite end of the spectrum with regards ‘rent vs buy’. America,Australia, and about a dozen European countries are experiencing massive property bubbles at the moment. Meanwhile in Japan, house prices have risen for the first time in 10 years or something.
It’s unlikely that you are going to experience a ‘negative equity’ problem if you purchase now.
Personnally I find rent rates here very high, it’s only now that I have the option of buying with the Mortgage market opening up to foreigners. I think you’ll find that you could be paying for your rent/mortgage here.
When the interest rates rise that will be in reaction to inflation, which along with higher consumer sentiment will mean more people will want to splash out on a house. So if worst comes to worst you can always sell your house for a nice tiny profit. Give it a good few more years and we could start to exhibite the signs of a bubble, and then the call to buy becomes a lot harder.
That’s the way I see things anyway…..
Given how low interest rates are in Japan, not a bad option to borrow money at 1-2% and buy a house in Japan ASSUMING YOU BUY THE LAND. Buying a ‘mansion’ is a totally different, and in my opinion assinine, exercise, because of the lack of claim you have in the event of sale/destruction/condemnation/etc.
Then again, since the cost of moving money overseas is pretty cheap, might as well use that cheap mortgage to buy a house in the US!
Is it really a viable option to borrow money from a local bank in Japan to buy a house in US? I would like to refinance right away in that case!!
Yes,
Companies like IFG do it. You have to remain in Japan to avail of the lower interest rates though, so once you leave you’ll have to remortgage with a lender back in the states.