Dave is correct. At this moment, Japanese yen is very strong against US$. So if you exchange your $ saving into Yen now and purchase real estate in Japan. You are very likely to lose $ based money once Yen become weak. Therefore unless you have large chunk of saving in Yen and committed owning property for very long time, I would not recommend it.
In addition, if you are non-Japanese living outside of Japan, you can not take advantage of at-around 1% residential mortgage (though adjustable). This super low interest rate (and limited supply of good-location condos) are key reason why real estate transaction in Tokyo is pretty active now.
Here is general real estate trend on Tokyo:
- Working age population in Japan is expected to decrease approx. 1% a year. While Tokyo is attract more people from outside, Population in Tokyo is considered "flat" for next 10-20 years.
- The most popular investment property in Tokyo for overseas investors are luxury condo in Central Tokyo. As for the rental yield, luxury unit rent has decreased 20-30% since fall 2008 as many international firms sent expatriates away from Tokyo. Considering current depressed economy, I do not see major upside in expatriates increase.
- Because of over-supply, approx. 11% of residential inventory are vacant. Vacancy rate is increasing steadily.
- Japanese bank do not put any value on "improvement" part of property. So the property aged 35+ years does not get any value EXCEPT for the value of the land. This is the major difference from established world class cities such as New York, London and Paris where land and improvement value increase over time.
You may want to review below site to understand general trend and stats on residential real estate in Japan.