Idea sharing on Japanese properties investing

I have left comments in a blog regarding a video clip about the Japanese properties investing. The below are a more in-depth sharing on the topic. I shall not hint any investment choice or make any suggestion but just a sharing on the basic concepts that one should hold when considering investing Japanese property market.

1. Japanese properties investing actually has lost steam in these couple of years. It started to gain people's attention back 5 years ago when prices were still low thus gross yield was still high (some could be more than 10%). Nowadays gross yield is around 5-6% in Tokyo market.
2. Having said that, Japanese property market is still one of the options in investment in term of diversification despite the yield is not particularly attractive.
3. Japanese property investment, in a certain extend, is comparable to bonds in term of income. Tenants, particularly Japanese, in general make rental payment on time. Landlords are free from worry on rental payment default. The downside is that due to the extended slow economy, no rental hike has been seen in the past 20 years. So it is like buying a 20 years bond. 
4. Having said the gross yield is dropping from 10+% in the past to 5-6 % now when rental level remained the same means the property price did rise from its bottom. 2015 to 2016 saw the biggest hike in property price in light of Mainland money's influx due to weak Yen against RMB. As the situation reversed in the recent year, prices stagnate at the comparatively high level. So the golden time in this investment seems to be over. 
5. Just like all investments, Japanese properties investment has its pros and cons. The negative side has well been discussed like the decreasing population thus rising vacancy, sharp depreciation right after occupation on new flats, high holding costs in terms of expenses and taxes etc. In fact, there are some misconceptions on the understanding and they are partly correct.
6. In general Japan's population is falling as a whole. However, employment opportunity in key economic cities like Tokyo saw population increase instead. Young people from allover the country has been drawn to there for a chance a better life, hopefully. On the other hand 3, 4 tiers cities or prefectures really suffer from population decrease thus lowering economy which in return further drives the young people away. This is a dead end but not for Tokyo.
7. New flats did depreciate much once occupied. However, new flats are never the target of investment. Japanese has an obsession on new things with no exception on housing so they buy new flats for their own families. However, this is consumption but not investment. 
8. When doing Japanese property  investment, it is exactly a business so one must know whom their customers are and what they need. 
9. The target customers of investment properties are those young migrants in Tokyo. They are tight in budget so mostly look for the flat types so called 1R (one room) or 1K (one kitchen), ie., shoebox flats. And they don't and can't afford to mind the flats are used.
10. Investment on used flats do not have problem of sharp depreciation because they have been depreciated when investors bought them.
11. So the golden rule No.1 is never buy new flat for investment.
12. Holding costs is high indeed. However, just like all businesses, when costs are known and all are factored in while there is still a good margin, then why not? The point is that I mentioned that the present gross yield is around 5-6% making the net yield around 2%. That's why I said the golden era has gone.
13. Having said the above down sides, Japanese property market is not without merit at all. Asset diversification is one of the point I have mentioned. When property market is sought as one of the options then look around world market now, the P/E ratio on all major cities are quite high now while Tokyo is at the other end of the spectrum. There seems to have a much higher margin of safety comparing to Canada, Australia and of course Hong Kong.
14. In fact, apart from the used shoebox flats, there are also other higher end flat types worthy for investment in Tokyo. Of course they are in highly sought after locations mostly in the so-called egg yoke zones in downtown Tokyo. Due to the limited supply but overwhelming demand, these used flats did not depreciate but otherwise. 
15. Investors from Hong Kong should forget their current experience but learn this new market from K1 if they want to succeed.