Loading ...Yes, it is a huge carry trade. Can it unwind as a trickle, or will it turn into a cascade? Watch the Yen as well as the yield, is my thought.
Here in Oz there have been many adverts for, and thus much discussion on, buying dilapidated Japanese properties, renovating them and then renting them out. The firms advertising this idea also offer all the services; permits, loan applications, legal fees, help in selecting contractors, materials etc. etc. and of course the properties are very cheap. Well, of course they are. There’s nobody to live in them, that’s why they are dilapidated to start with. Everyone is dying. Dead people don’t rent.
However with the price of a renovated 4 bed house in Tokyo a quarter that of Sydney, or outside at say Nagano for a sixth the cost, it just seems too good to miss! But if the country banks are in trouble with their loan portfolios, offloading obsolete properties, the renovation of which will also stimulate the local economy, to gullible gaijin is a great idea.