There is a great opportunity to buy foreclosed property. In most markets foreclosed properties trade at a small discount to the secondary (private) markets...Japan is an exception. But in any respect you should be looking for value where others dont tread. There are 3 reasons that put off investors:
1.
Risk - now knowing every aspect of the property, ie. Japanese are scared of ghosts, that yakuza might be involved, suicide in house, conflict with neighbours or previous owners without doing their research.
2.
No market - People buy for living, holidaying or investing. The main reason is for living, and that market is attractive for locals who know. But if there are no local buyers or they are not commercially astute, then it falls upon investors or holidayers. Well holidayers seldom buy overseas, and investors need tenants...so illiquid rural markets are cheap.
As far as I can see the best opportunities to buy foreclosed property are in Japan and the Philippines. Why?
In Japan, the locals are so risk-averse that they are scared off by the prospect of buying something that they can't look inside. They are not commercially astute, so there are alot of opportunities. If you are looking for a holiday house (rather than an investment property) opportunities are particularly good in rural areas. Because rural areas are being depopulated, the infrastructure is particularly good.
In the Philippines, you can get 10-20% discount off market prices for condos which foreigners can own. Land can only be bought by locals or expats. Because its a poor country, its cheap. You can buy a studio for as low as $US20,000. The universal (commercial) banks advertise properties in the newspapers and their websites. But you dont need to go there.
There will come a time when foreclosed property will make sense in western markets, but there is generally not the same advantage. See my website for 'Real Estate' at
www.sheldonthinks.com.