I am looking at the property market in Japan, and clearly one can get much higher yields than in HK, although mortgages are very difficult to get (so one needs to pay for the whole property upfront).
I know someone I trust who can help manage my property. I trust Japanese people to work hard and be honest, so I feel more comfortable investing in Japan than for example in the Philippines and Thailand.
My concern is the public debt. 250% of gdp and growing steadily?!?!?!? That's double than even Italy and USA, and it has grown x 10 over the last 25 years?!?!?!? http://alphapatriot.com/wp-content/u...hn-Mauldin.jpg
I can't see them solving the problem of public debt, but what will happen to the currency and housing market? What they might do is to default on their debt and have a new currency, called the Kico. Houses will be traded in Kicos and you can sell Kicos to buy HK$. The net outcome, after a year of confusion and uncertainties, might be that nothing much changes.
I don't find prices in Japan overly high, so I don't think there will be massive devaluation of the currency, or loss of value of housing. Japan is still an exporter, although 20% of the products it produces are exported to China, and the two don't like each other. Also, the trade balance is deteriorating: Japan’s record trade deficit raises fresh doubts about Abenomics - FT.com
So I ask the economists out there: what is to be be expected in terms of the exchange rate between Yen and Euros or US$? Will the value of the Yen drop? Over the last 18 years it has gone up and down, but there hasn't really been any clear trend: JPY/USD Currency Conversion Chart - Yahoo! Finance . Japan is still a strong industrial country, so what can one expect? Resilience or recovery, or disaster?
And what does you think will happen to the value of housing in Japan (in the city centres, not the countryside!)?
Overall not a very positive situation, and I don't see a plan to change (apart from Abenomics), but on the positive side a well educated and hard working workforce. Japan will never be Zimbabwe, but of course a loss of value of 50% will make the investment not worth making.
Any thoughts?