subject: Powerful Japanese Yen influencing Hawaii Real Estate [print this page] Powerful Japanese Yen influencing Hawaii Real Estate
For international Japanese travelers and investors, Hawaii continues to be a premier vacation and second home destination. With a dominant Asian demographic of nearly 50% in Honolulu and a wealth of Hawaiian shops, restaurants, and attractions with Japanese accommodations and translations, visiting and living in Hawaii's paradise is a natural transition for Japanese. Continuing forward into 2010, Japan remains the dominant international visiting demographic for incoming travelers staying overnight in Hawaii. With upcoming changes allowing flights from Japan to Honolulu to depart from Tokyo's convenient Haneda airport, signs of continuing tourism growth in Hawaii are kindling. Even with promising advancements in convenience and a growing popularity with the Japanese, Hawaii's seeing a large boost in tourism from another source the Yen.
The purchasing power of the Yen within the United States continues to grow at a record rate. In June of 2007, the dollar overpowered the Yen with a 124 / $1 ratio. During this time, approximately 1.3 million Japanese visitors stayed in Hawaii for overnight or longer. In just over 3 years, October 2010 records a conversion rate of 82 / $1 ratio. These figures represent a staggering 34% increase since June of 2007. 2010 is projected to host approximately 2 million overnight visitors from Japan, a result largely contributed by the Yen's growing strength.
Japanese investors and aspiring second home owners are privy to the benefits the Yen has presented them with. In simple terms, Japanese home shoppers have massive buying power with the favorable exchange rate. This enables Japanese buyers to purchase homes and condominiums at a substantially discounted rate. In June of 2007, a home listed at $1,050,000 would cost 130,200,000. Compared to the current exchange rate in October, that same home would cost only 86,100,000, reflecting the 34% exchange rate difference.
Along with the substantial initial discount granted through the currency exchange rate, the vast majority of analysts believe this favorable rate for the Yen will not continue. As such, Japanese investors and second home owners purchasing Hawaii Real Estate under the favorable Yen market will soon benefit from the dollars recovery. When the dollar recovers and the real estate market rebounds, homes purchased during this historic conversion rate will soon become more valuable. The net result will be a discounted purchase price followed by an inflated resale price.
Buy Low, Sell High has always been the motto that investors live by. The current Yen / Dollar conversion rate certainly enables Japanese investors and second home owners to easily exploit this law of investment. Analysts are confident in the fact that the Yen cannot continue to be this powerful without government intervention. When it comes down to the best time for Japanese to invest in Hawaii, there literally has never been a better time than now.
