Political worries, low yen attracting more Chinese buyers to Japan's real estate market

"The number of people accessing our site is up by 30% over this time last year," Zhao Kiyoshi, representative director of Shenjumiaosuan, a real estate platform based in Tokyo's Roppongi district, tells Spa (Sept 13).
"I get the impression that sales contracts are also on the rise," Zhao continues. "A year ago, most of the sold properties were priced around ?15 million, but recently it's not unusual to see places selling for ?100 million or more."
According to Zhao, investments in Japanese real estate by people from the "Chinese sphere" -- which would include mainland China, Hong Kong, Taiwan, Singapore and other overseas Chinese communities in Southeast Asia -- had already been increasing from several years ago, but the recent fall in the value of the Japanese yen has convinced even more people that now's the time to shop.
For those with assets in Chinese yuan, the exchange rate advantage is said to be up by around 20% over a year ago.
"I bought a used apartment in Saitama priced at ?130,000,000," a Shanghainese investor in his 40s tells the magazine. "The building's corporate ownership had recently changed, and I expect it will provide me with a stable source of rental income."
The investor said the internet data was enough to convince him and he'd proceeded to buy the property sight unseen.
The business upswing is not limited solely to the greater Tokyo area. Kyoto Shimbun on June 19 reported that Chinese buyers had been snatching up houses in the vicinity of the Temple of the Golden Pavilion (Kinkakuji) and condominiums in the city priced around ?100 million. Most of the sales were online transactions, meaning the buyers had not even viewed the properties beforehand 
Japan's property tax system is another attraction. Unlike such countries as Canada and Australia, where non-resident property buyers are taxed at rates 20% to 30% higher than the locals, Japan does not penalize non-citizens or non-residents in a similar manner.
"Presently, Chinese-related investment funds have been buying up properties in Shinjuku, Roppongi and also buildings housing food and beverage outlets in the Ginza district," Junji Sakaki, a journalist who covers real estate, is quoted as saying. "Many properties had lost tenants to the coronavirus pandemic, and their owners were in a rush to unload them.
"The new buyers are counting on revitalization of the neighborhoods when the pandemic finally winds down," Sasaki added.
According to an unnamed Chinese broker based in Japan, in addition to moneyed buyers from mainland China, some Hong Kong residents had been shifting their assets abroad in anticipation of further political crackdowns by China. The sharp recent drop in the yen's value has given them additional incentive.
Friction between Taiwan and mainland China has also stimulated wealthy Taiwanese to buy up prime residential properties. From the start of this year, they've been buying deluxe condominiums in such wealthy neighborhoods as Shoto, (near Shibuya) and Azabu, as well as commercial properties.
Last August, PAG, a Hong Kong-based investment fund, purchased the Nagasaki theme park Huis ten Bosch (Holland Village) from Japan's H.I.S. travel agency for approximately ?100 billion.
"As the coronavirus pandemic abates, more inbound travelers will be visiting," predicts business journalist Masato Nakamura. "But I don't expect the kind of 'explosive buying' pattern at Japan's home electronics shops and drugstores that was seen previously. This is because of the emergence of more high-quality domestic brands that Chinese can buy at home." 
According to Nakamura, the main motivation of most Chinese who visit Japan is in search of business opportunities. "This is their national characteristic and a point we should keep in mind after the pandemic lifts and inbound travel resumes," he said.
A number of think tanks have forecast that by 2030 the sale of China's economy will surpass the U.S., and the world's economy will evolve into three major regional economic blocs of North America, Europe and Asia.

© Japan Today
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