"I've Never Seen Prices Like This"…Speculation Surges in Japan, Buying Apartments, Whiskey, and Gold

Bank Interest Rates Low and Inflation Combined
House Prices Reach Highest Level for 11 Consecutive Months

In Japan, where interest rates on savings and time deposits at commercial banks are low and inflation is also a factor, there is a growing trend of investing in tangible assets instead of holding cash assets. Young investors in their 20s and 30s are joining the investment wave, causing prices of not only real estate but also whiskey and gold to rise simultaneously.

On the 14th, Nihon Keizai Shimbun (Nikkei) reported, citing a survey by Tokyo Kantei, a real estate research company, that the price of a 21-pyeong (approximately 69.4 square meters) condominium in six central wards of Tokyo reached 100.95 million yen (978.44 million KRW) as of December last year, marking the highest price for 11 consecutive months. Especially, with a large influx of Chinese overseas investors into Tokyo, housing prices in Tokyo continue to soar day by day.

Young investors in their 20s and 30s are turning their attention to whiskey and gold, which are relatively lower in price compared to real estate. Consequently, whiskey prices have surged sharply. The wholesale price of a 700ml bottle of Suntory Yamazaki 12-year-old whiskey reached 24,000 yen (213,000 KRW) last month, a record high that is 60% higher than the same month last year. Keisuke Oota, president of Joy Lab, a liquor wholesaler located in Tokyo, analyzed, "We have never experienced such market prices before," adding, "Because the investment barrier is low, it is highly likely that beginners in investment are jumping in."

Gold, which tends to gain popularity during inflation, is also attracting attention. Nikkei emphasized, "Although the retail price of gold already surpassed 10,000 yen (88,797 KRW) per gram in August last year, individual purchases continue." According to the research organization World Gold Council, domestic gold sales last year were 2.3 tons, significantly lower than 11.2 tons in 2022. Instead of a strategy of buying cheap and selling high, the mentality has shifted to investing regardless of the high price because it is better than savings. Recently, the number of newlyweds purchasing gold bars as a milestone for marriage or childbirth has also increased significantly. A representative from Gold Shop Mitsubishi, a gold store operated by Mitsubishi Materials, said, "There has been a noticeable increase in young people in their 30s buying gold to secure retirement funds."

Gold-related exchange-traded funds (ETFs) are also emerging as new investment destinations. As of the end of last month, the net asset value of the gold spot ETF managed by Mitsubishi UFJ Trust and Banking Corporation reached 298.1 billion yen (2.6478 trillion KRW), a 47% increase in one year.

This represents a significant change in Japan, where asset management has traditionally relied on savings and time deposits rather than stocks or tangible investments. According to the Bank of Japan (BOJ) flow of funds statistics, as of the end of September last year, household financial assets amounted to 2,121 trillion yen (18,839 trillion KRW), with cash and deposits accounting for more than half. This is a large difference compared to Europe or the United States, where the ratio is between 10% and 30% as of the end of March.

Nikkei explained, "During the deflation period, savings and time deposits were a means to protect assets stably, but the moment prices start to rise, leaving cash as is will eventually reduce assets," adding, "Funds from individuals sensing risk have begun to flow into tangible assets."

This content was produced with the assistance of AI translation services.