High-end Realty Specialist

In 2024, the global real estate market has underwent profound changes influenced by both political turmoil and economic shifts.  With the conclusion of the U.S. presidential election, Trump will return to the White House on January 20, 2025. His policy directions and economic plans are bound to have a far-reaching impact on the global economic landscape and real estate market. Understanding Trump’s policy priorities will be key to formulating investment strategies, especially for Japanese investors who are highly rely on external market fluctuations. This coming year brings both challenges and opportunities. 

 2024 Key Review of the Global Real Estate Market

1. Market Volatility Amid Political Uncertainty
   In 2024, the intense competition of the U.S. presidential election brought uncertainty to global markets. As the election results became clear, markets gradually stabilized. However, the impact of future policy directions remains a focal point of concern. Trump’s new policy propositions, including immigration controls and the strengthening of domestic energy and infrastructure, may alter the supply and demand dynamics of the real estate market.

2. Economic Recovery and Real Estate Demand
   In 2024, the global economy gradually stabilized during the post-pandemic recovery. While the real estate market warmed up accordingly, the performance of regional markets varied due to differences in politics and demand.

   North American Market:
   Trump’s re-election introduced significant variables to the U.S. real estate market. Although inflations pressures reduced,  his tough tariff policies may drive up construction costs, further exacerbating housing prices. Moreover, his tax cuts primarily benefit wealthy individuals and corporations, offering limited support for improving the general population’s purchasing power.

   Asia-Pacific Region:
   This region stood out as a highlight in 2024, demonstrating stable growth and diverse investment opportunities. Japan’s market showed stability and diversified growth in 2024. Real estate demand in major cities like Tokyo and Osaka continued to rise, with commercial properties benefitting from domestic corporate expansion and international tenants’ demands. Additionally, low-interest-rate policies continued to support the residential market, with prominent performance in high-end residential and investment-oriented properties.

3. Impact of ESG and Technology
   Sustainability became a key focus in the global real estate market. For example, green buildings and smart cities attracting many investors’ attention. Meanwhile, the application of AI and big data improved the efficiency of market analysis and transaction, injecting new momentum into the real estate industry.

Japan’s Investors’ Market Trends in 2024

1. Active Participation in Overseas Markets
In 2024, Japanese companies remain active in overseas investments, mainly in North America and Southeast Asia.

• North American Market
  Despite policy uncertainties, the U.S. still attractive to Japanese investors because of its laws and economic growth potential.
  Key investment areas include manufacturing, high-tech industries, and infrastructure projects. For example, many Japanese companies are working on renewable energy and electric vehicle industries in the U.S., highlighting their confidence in the American market’s future.

• Southeast Asian Market
  High-growth potential keeps attracting Japanese investments, especially in residential and commercial real estate. For example, invest commercial and infrastructure projects have grown a lot in Vietnam and Singapore, showing how attractive Southeast Asia is as an emerging market.

2.  Stable Growth in the Domestic Market
In 2024, Japan’s real estate market is growing steadily, with domestic investments hitting their highest level in 10 years.
Demand in key areas like Tokyo and Osaka remains strong, even though overseas markets are attractive, especially with the recovery of international leasing in commercial real estate. Low interest rates and stable policies make investors feel secure. With less competition from foreign investors, local buyers can purchase high-quality properties at reasonable prices. Land prices have also been rising for three years in a row, especially in main cities and infrastructure develop area.

3. Diversified Investment
To handle global economic and political uncertainties, Japanese investors focus on Investment Diversification. They are putting their money into different regions and sectors, including stable housing markets in Japan and high-potential commercial real estate abroad. Japanese investors prefer markets with strong growth potential and long-term returns. They are moving their investments from China to emerging markets, like Southeast and South Asia. Key areas of investment include renewable energy, infrastructure, semiconductors, real estate, and logistics.

Future Trends and Strategies of Japanese Investors

Challenges and Opportunities for Japanese Investors under Trump’s Policies

• Cost Challenges from Trade and Tariff Policies

Trump’s “America First” policy might raise import tariffs, which could strongly affect Japanese investors in U.S. real estate projects. Higher tariffs on building materials will raise construction costs and lower profits for developers. Japanese developers who depend on overseas materials will need to rethink their sourcing options to avoid higher costs and supply problems.

• Changes in Immigration and Job Market

Trump’s new term might tighten immigration rules, which could strongly affect the U.S. real estate market.
A drop in immigration causes labor shortages in construction areas like Texas and California, making labor more expensive and delaying projects. Also, fewer immigrants might lower the demand for housing in some cities.

Take Opportunities and Reduce Risks

1. Diversify Investments to Reduce Market Risk
   Japanese investors should invest in the local market and Asian markets, like Vietnam and Malaysia, to deal with the uncertainties in the U.S. market.

2. Improve Supply Chains and Manage Costs
   Use more local materials, look for other supply options, and rely less on expensive materials to keep construction costs under control.

3. Adjust Investment Portfolio
   Allocate funds flexibly to explore growth opportunities in infrastructure-related real estate, like logistics centers and transport hubs, while handling changes in the housing market carefully.

4. Exchange Rate Management and Financing Strategies
   Use financial tools to protect against dollar changes and take advantage of low-interest yen financing to keep returns steady.

Trump’s new policies will create a market environment with challenges and opportunities.
Japanese investors should spread their investments, change strategies as needed, and improve risk management to find growth opportunities in uncertain times and keep steady growth in the global real estate market.

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