Nearly 60% of ultra-luxury penthouse buyers in Tokyo, Osaka paid cash

More than half of buyers of ultra-luxury high-rise penthouses in central Tokyo and Osaka purchased their units in cash, without taking out any loans, a new analysis has found.

Japan's Nikkei newspaper analyzed registry records for 303 tower condominium buildings in the two cities' central districts and found that about 60 percent of the penthouses had been purchased in all-cash transactions.

Among the six central Tokyo wards surveyed, Chiyoda Ward recorded the highest share of cash purchases at 69 percent. Minato Ward followed at 60 percent, while Shinjuku and Shibuya wards each came in at 59 percent.

Osaka showed a similar trend. Chuo and Kita wards each recorded cash-purchase rates of 53 percent, while Nishi Ward stood at 50 percent — meaning more than half of transactions in all three wards were cash deals.

Of the 1,867 penthouse units surveyed, 100 — about 5 percent of the total — were owned by overseas residents.

By country, residents of China held the most units at 47, followed by Taiwan with 16 and Singapore with 11.

Nikkei noted that the actual share of foreign ownership could be even higher. Real estate is often purchased through Japanese corporations, meaning the registered buyer may appear to be a domestic entity even when the true owner is an overseas investor.

The newspaper cited lower financing costs and faster transaction speeds as the main reasons wealthy buyers prefer cash deals. Paying in cash eliminates mortgage interest and various fees, and allows buyers to secure scarce luxury properties ahead of competing bidders.

Experts say ultra-luxury homes in Japan have increasingly come to be seen as safe assets, drawing steady investment demand from wealthy buyers at home and abroad. Foreign capital is likely to keep flowing into prime areas of Tokyo and Osaka in particular, analysts say, given limited property supply there and the added appeal of a weak yen.

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https://biz.heraldcorp.com/article/10785459