The cost of owning a house

[onehunga 26]

I've just googled their names and read their blog. It's pretty interesting and has lots of good information about housing in general. I would warn however that they sound like kind of bohemian people who are looking for something 10 million max but won't be too inconvenient for them (read: out of the way) as a couple who are reluctant to own a car. Lots of houses in that price range within striking distance of Tokyo are going to have lots of the issues they talk about in the places they see in their blog. Looking for a cheap house in the exurbs but being anti-car, esp. given minimal kei car ownership costs, strikes me as making things difficult for yourself. In inaka, you drive to the increasingly big and on cheap land increasingly far from the station supermarket that has outcompeted the shotengai by the station and any other smaller inaka shops dotted about here and there. That's just the way it is.

 

Anyone who can afford to ski can probably avoid a lot of the issues they talk about with old houses by spending a bit more money on a better one.

 

Very good review of what they are trying to do. They do seem to be making it hard for themselves to buy a property. Still, theres some good info about the whole process in amoungest their various blogs and articles.

[DumbStick 13]

Think me and the missus have enough to stump up the cash and so will go that way.

Very much prefer to avoid any kind of loan if possible.

[snowdude 44]

Hey SJ Family

 

I was wondering if anyone knows if your are able to buy property in Japan being an Australian? An if so is it a pain staking process?

 

Are you in Japan? If not, then you could do it, but it would not be easy.

 

Well we have just put a deposit down on a plot of land in Kobuchizawa, next step will be getting a house built on it.

It is a pain in the rear end for us foreigners, but not impossible just involves tons of paper work and time, so my wife is going to deal with that under her name as she is Japanese it is much more simple.

[andee 0]

Thanks guys

[RobBright 35]

Hey SJ Family

 

I was wondering if anyone knows if your are able to buy property in Japan being an Australian? An if so is it a pain staking process?

 

Are you in Japan? If not, then you could do it, but it would not be easy.

 

Well we have just put a deposit down on a plot of land in Kobuchizawa, next step will be getting a house built on it.

It is a pain in the rear end for us foreigners, but not impossible just involves tons of paper work and time, so my wife is going to deal with that under her name as she is Japanese it is much more simple.

 

If you live in Japan, yeah, it's not so bad. Can only imagine the headache if I were applying from overseas.

[snowdude 44]

Think me and the missus have enough to stump up the cash and so will go that way.

Very much prefer to avoid any kind of loan if possible.

 

We thought to put a hefty some of money down towards the new house, and am still thinking which to do, but we have been advised by several banks, as well as consultants that taking out a loan for most of the amount of the house is better as you will have less tax to pay. Simply pay the loan for a few years maybe max 10 for example then just pay the rest off in one lump sum, this apparently will reduce the total even when factoring in the percentage interest on the loan!

[pie-eater 207]

Think me and the missus have enough to stump up the cash and so will go that way.

Very much prefer to avoid any kind of loan if possible.

 

We thought to put a hefty some of money down towards the new house, and am still thinking which to do, but we have been advised by several banks, as well as consultants that taking out a loan for most of the amount of the house is better as you will have less tax to pay. Simply pay the loan for a few years maybe max 10 for example then just pay the rest off in one lump sum, this apparently will reduce the total even when factoring in the percentage interest on the loan!

 

Very selfless of them!

 

Hurray for bankers.

[RobBright 35]

Less tax you pay = more money to the bank.

[pie-eater 207]

Just out of interest. If you go to Mr House Making company, will they clearly explain all of the costs to you?

And give you various excite stimulations that show you which is actually the best way to do things?

Or do you have to go visit banks and scrimp around to find out yourself?

[pie-eater 207]

I meant simulations.

[RobBright 35]

Just out of interest. If you go to Mr House Making company, will they clearly explain all of the costs to you?

And give you various excite stimulations that show you which is actually the best way to do things?

Or do you have to go visit banks and scrimp around to find out yourself?

 

Yeah they do. We got a breakdown of ALL the costs. Sounds great, but when they break down where all the money goes, even down to the 25,000yen for locks and keys, it gets a bit boring after a bit.

 

And that's before you sign for the mortgage, as by law, they have to read through the WHOLE mortgage contract, with a witness and a lawyer present, before you sign it. 4 hours of your life gone.

[snowdude 44]

Just out of interest. If you go to Mr House Making company, will they clearly explain all of the costs to you?

And give you various excite stimulations that show you which is actually the best way to do things?

Or do you have to go visit banks and scrimp around to find out yourself?

 

The housing companies advise as to the best and most economical way to but the house as well as all the charges, that go with owning the house.

Both the banks, loan companies and the house building companies do simulations so that you can compare all the figures, fees, etc.

 

That is what we are doing at the moment, before we decide which route to take.

[DumbStick 13]

That sounds good.

Definitely something to ask.

The whole purpose of paying in cash really is to ultimately save on the total, and so if it isn't actually going to do that then I would re-consider.

If we are sat down and they pumped out the numbers for us, big help.

[Go Native 70]

Nar not in Japan til March. I think the hardest bit will be getting an Australian Bank or Finance Company to come to the party.

 

Prior to the GFC a number of Aussie banks were allowing Aussies to borrow against equity they had in property in Aus to purchase property in Niseko. Since the GFC though much of that finance has dried up. It was fairly specifically for Niseko though because it was one of the very few areas experiencing any sort of capital appreciation in Japan. It was also possible to get loans in Yen from some Aussie banks for property purchases in Japan. Such loans though can be affected by exchange rates. After the GFC I knew some people who had major issues with such loans. Getting finance in Japan if you don't have a Japanese spouse or have permanent residency is pretty much impossible. Depending on where you are looking at buying you may be surprised at how cheap houses are in Japan. Especially when compared to the Aussie housing market. You may not need to worry about a loan at all.

[Go Native 70]

That sounds good.

Definitely something to ask.

The whole purpose of paying in cash really is to ultimately save on the total, and so if it isn't actually going to do that then I would re-consider.

If we are sat down and they pumped out the numbers for us, big help.

 

It's obviously better if you don't require a loan. You don't end up paying any interest over time and interest is a bit like rent, you never get that back. Generally for a home you intend on living in it is best to have as small a loan as possible to reduce the interest you end up paying. Still interest rates are at near all time lows around much of the world currently and especially in Japan. It's not that bad a time to have a loan.

[Metabo Oyaji 71]

We thought to put a hefty some of money down towards the new house, and am still thinking which to do, but we have been advised by several banks, as well as consultants that taking out a loan for most of the amount of the house is better as you will have less tax to pay. Simply pay the loan for a few years maybe max 10 for example then just pay the rest off in one lump sum, this apparently will reduce the total even when factoring in the percentage interest on the loan!

 

I'd like to see the numbers used to justify this, because it seems unlikely.

 

The mortgage tax credit is currently 1% of the remaining principal each year for 10 years, capped at 20 man-yen/year (2,000 man-yen principal balance) for an ordinary house, 30 man-yen/year (3,000 man-yen principal balance) for a certified low-energy house.

 

So it is basically a reduction in your mortgage rate of 1% for 10 years, meaning you can only come out ahead if your mortgage rate is below 1% to begin with. Looking at rates now, that means a floating-rate loan, such as the 0.88% one being advertised now at Shinsei Bank.

 

Supposing one took out a 0.88% loan for 3,000 man-yen, then one would effectively be "earning" 0.12%, or close to 36,000 yen the first year, falling slowly in subsequent years as the principal balance goes down. But, taking out a loan also involves fees for paperwork and lien-registration of a few man-yen, plus perhaps loan insurance (guarantor fee) of 200,000-300,000 yen. Then, once your loan is paid off, you have to pay another 10-20,000 yen for lien-cancellation paperwork. So, IF one gets the floating-rate loan at 0.88%, and IF that rate never rises for the next 10 years, then seems like you'd come out about even with not having taken the loan in the first place. Otherwise, you would come out behind by taking the loan.

 

Now perhaps they are assuming you can invest your money in something else in the meantime and come out ahead that way, though nothing safe pays anything worth going through the hassle of taking out a mortgage for, seems to me.

 

But I may be missing something. Would like to see what numbers these banks and consultants are basing their recommendations on.

[NoFakie 45]

I've just googled their names and read their blog. It's pretty interesting and has lots of good information about housing in general. I would warn however that they sound like kind of bohemian people who are looking for something 10 million max but won't be too inconvenient for them (read: out of the way) as a couple who are reluctant to own a car. Lots of houses in that price range within striking distance of Tokyo are going to have lots of the issues they talk about in the places they see in their blog. Looking for a cheap house in the exurbs but being anti-car, esp. given minimal kei car ownership costs, strikes me as making things difficult for yourself. In inaka, you drive to the increasingly big and on cheap land increasingly far from the station supermarket that has outcompeted the shotengai by the station and any other smaller inaka shops dotted about here and there. That's just the way it is.

 

Anyone who can afford to ski can probably avoid a lot of the issues they talk about with old houses by spending a bit more money on a better one.

 

Very good review of what they are trying to do. They do seem to be making it hard for themselves to buy a property. Still, theres some good info about the whole process in amoungest their various blogs and articles.

 

Though its news is not new, you do get some good stuff in the Japan Times. I hope it can keep going in years to come.

 

Since most Japanese old houses sell at deep discounts to when they were new, it makes most sense to buy a good one instead of limiting yourself to the absolute cheapest. More expensive bits of land are generally going to have had more expensive houses built on them, all things being equal. Even if the house does, the value of the land will not go to zero. Hence, the old house you get for zero on a more expensive piece of land could well be better than the house you get for zero on a cheap bit of land. Obviously the land you're paying more for may also have reasons for it having a higher value, such as a convenient location or the sunlight the people writing the blog want.

 

We've got a mortgage but no-one read it out to us for four hours. I did have to write my name and address out about ten times and it had to be in my writing. That must have taken an hour!

 

We built our house just before the GFC, and if we had built a smaller one and put the remaining money on investments, we would have lost a big chunk, esp. if we'd bought something non-yen-denominated.You can do what may seem the right thing and still get burned. People who do do not deserve disdain, just as those who get lucky from timing plays do not deserve book contracts or tv appearance as "investment gurus".

[HelperElfMissy 42]

Hey SJ Family

 

I was wondering if anyone knows if your are able to buy property in Japan being an Australian? An if so is it a pain staking process?

 

Are you in Japan? If not, then you could do it, but it would not be easy.

It very much depends on where you are buying and if they have experience in International Property Purchase or not.

As GN said, they have had a lot of experience with Aussies buying in Niseko, and from what I can gather there's a lot of experience in Hakuba real estate also. If you are buying somewhere where it is a rarity, then good luck with that!!

 

But if you are buying in somewhere like Niseko the process is streamlined. All the difficult bits are coordinated for you.

 

Nar not in Japan til March. I think the hardest bit will be getting an Australian Bank or Finance Company to come to the party.

since the GFC, again... Good Luck with that!

But if you are buying in cash - it is very simple.

 

(note: buying in cash doesn't necessarily mean you have the spare cash, but if you can get a loan using security you already have without using the Japanese property in the security mix, you can then buy it 'cash')

[Wizz 11]

I imagine Mt Granview too.

[HelperElfMissy 42]

Oh of course.

And get in NOW for incredible property growth gains - more than you'll get with steroids and protein powders

[muikabochi 208]

Mt Granview property values are going to rocket.

 

Right now there's a big house for sale over there at 300 man en. Once that's snapped up and in a year that would likely be 10 times that!

[DumbStick 13]

Going to go and have a talk with show house people tomorrow.

Looking forward to it, hope they can answer lots of my questions.

[DumbStick 13]

Is 1.5 million yen cheap for a plot of land 180sqm?

 

Sounds pretty good to me!

[RobBright 35]

Yes, but depends where that land is. In Hokkaido, then probably no. In Tokyo, then yes.

[NoFakie 45]

Depends where it is.

 

Its more than we paid though