In late April, Patience Capital Group released the 2024 version of PCG Insights – An eye on Japan which outlines the firm’s 2024 view of Japan’s real estate market.
Patience Realty is a proud affiliate of Patience Captial Group.
Below are some quotes from the report with a link to the full report at the bottom of this article.
On Japan’s Inbound Tourism
World Tourism and Travel Council estimates that tourism share of GDP and jobs in Japan will rise from 7.2% and 8.7% respectively in 2019, to reach ~8% of GDP and exceed 10% of jobs by 2033 (1 in 10 jobs).
This reflects positive long-term demand prospects for Japan’s retail and hospitality sectors, notably in the key Japanese cities.
On Japan’s Residential Property Sector
Despite the run-up in prices in recent years, Japan remains attractively priced vs other similar major economies when making global comparisons for high-end housing.
Page 8 Courtesy of Patience Capital Group
Japan also ranks favourably in terms of income affordability, especially when paired with its high quality of living, making it an appealing destination for both foreign and domestic buyers.
On Japan’s Hospitality Property Sector
Given healthy long-term demand and supply fundamentals, ADRs are projected to continue rising albeit at a slower rate, particularly for the luxury hotels where rates have risen to record levels in both US$ and local currency terms. We also expect occupancy growth to play a more meaningful role in driving RevPAR growth going forward.
On Japan’s Investment Market Outlook
While recent investor sentiment surveys continue to highlight Japan, notably Tokyo and Osaka, as one of the most favoured markets in Asia Pacific, there are also indications of waning “buy” sentiment in light of Japan’s cyclical positioning.
With cap rates at their historical lows, more investors may look to take profit, or target assets where value can be added or sectors where there is more growth upside.
