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Commentary: Rich Chinese snapping up “cheap” Japanese real estate

  • 2015-02-09 15:00:00
  • , Asahi
  • Translation

(Asahi: February 8, 2015 – p. 2)


 By Toshihiro Yamanaka, special senior writer


 A photo in a Hong Kong magazine’s report on senior Chinese officials’ accumulation of wealth caught my attention. A house built of wood in Gion, Kyoto, was shown to be a “luxurious house in Japan given by a Chinese businessman friend as a present.”


 The suspected recipients of this present are Ling Jihua and his wife, close confidants of former President Hu Jintao. They belonged to the inner circle of power and reportedly have savings of 700 billion yen.


 Rich Chinese are now also eyeing blue-chip properties in Tokyo. According to Daiichi Realtor President Takashi Narata, 50, who is well-versed in overseas investment trends, 50% of buyers of super luxurious condominiums in central Tokyo are foreigners and 90% of them are Chinese. Rich Chinese are discovering that real estate in Japan is surprisingly cheap.


 The Chinese used to invest in Canada, the UK, and Australia a few years ago. However, regulations have become stricter there. In Hong Kong and Shanghai, three-bedroom units in high rise residences now cost 800-900 million yen. Japan now seems to be an affordable country, especially with the recent wave of yen depreciation.


 Small investors looking for one-room condominiums are also flocking to Japan. According to a Hong Kong real estate agent specializing in Japanese properties, one reason is that non-payment of rent and squatting are rare in Japan. Also, laws on taxes and rent do not change abruptly, unlike in China.


 The decisive factor is high return from renting out properties. In the UK, Hong Kong, and elsewhere, properties are expensive while rents are cheap. In Japan, it’s the other way around – properties are cheap while rents are high. Apparently, it is a well-known fact that especially high profits can be earned from renting out properties in Fukuoka and Osaka.


 What if the relative decline in Japanese land prices and yen depreciation continue? Chinese on the mainland, as well as Chinese living in other Asian countries, will be snapping up Japanese properties. Some people may be displeased by this and start complaining on the Internet or in their neighborhoods.


 In the past few years, even while Japanese bookstores were carrying numerous anti-China titles, bookstores in the Chinese-speaking countries were not selling anti-Japan books. On the contrary, “buy Japan” books encouraging investments in Japan were selling well.


 The Chinese communities are basically business-minded and give priority to pragmatic interests. The dispute over ownership of islands will not drag on for an overly extended period. Furthermore, everybody, from corrupt senior officials to employees with some savings, is preoccupied with investing. A large number of Chinese are expected to flock to Japan during the Lunar New Year holidays starting next week. They will probably be looking around for properties with good value in Fukuoka and Osaka. (Abridged)

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