According to statistics compiled by the Ministry of Land, Infrastructure and Transport (MLIT) for fiscal 2006, 2300 trillion yen in real estate is held in Japan by private business, individuals, the national government and public organizations. Of that amount, only 45 trillion is being traded.

The 2007 “White Paper on Land” from the MLIT includes the results from a survey of overseas real estate investors. Findings included:

When asked what they found attractive about investing in Japan, respondents most often cited “the expanding real estate investment market,” followed by Japan being “the world’s second largest economy” (see figure below), making it clear that it is the economy and size of the real estate market in Japan that are attractive. Another common response given was “the effects of diversification.”

When asked about how the outlook of their investments, 76% responded “somewhat good” and 20% responded “strong,” indicating that more than 90% of respondents feel positive about their real estate investments in Japan.

The “White Paper on Land” also discussed the securitization of real estate: The amount of real estate and trust beneficiary rights securitized in fiscal 2006 reached 7.8 trillion yen, increasing 13% over the previous year (see graph below).

These surveys and summary of the real estate market show that Japan really is an attractive market for investors.