Advice on Buying Property in Japan

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Investors interested in buying Japan residential property should focus on tiny apartments in Tokyo and avoid the countryside, says the author of a book on buying property in Japan.

"Little places are where the action is, no one wants to live in larger homes," Christopher Dillon, author of Landed, the Guide to Buying Property in Japan, told the South China Morning Post.

Tokyo flats that are typically about 140 square feet are popular with office workers, Mr. Dillon says. There is barely enough space for a sleeping area and a combination kitchen-bathroom space. But salarymen in Tokyo simply want a place to sleep, he said.

Japan residential property is still relatively inexpensive compared to other parts of Asia, offering yields as high as 10 percent. But he cautioned potential investors to stay away from the rural areas.

"The countryside is becoming like Detroit almost, with petrol stations and hospitals closing," Mr. Dillon said. "You can buy very cheaply in rural areas, but who is going to want to go there? Everyone is moving to Tokyo."

Okinawa, which is popular with retirees, is one exception, he said. Recreation properties in areas such as Hokkaido are also popular, but he warned that many areas are overbuilt.

In the cities, it is best to look for newer buildings, which were constructed to higher earthquake standards. It is also important to confirm that any deals includes a share of the underlying land, which is not always the case.