Chinese buyers lured by Tokyo property prices and yields

In mid-September, the CEO of a real estate brokerage held an investment seminar in a function room at the Shangri-La Hotel in Shanghai. The 40 attendees listened carefully to every word. This seminar was not about investing in Shanghai or Hong Kong, but was focused on the Japanese property market, in particular the areas in Tokyo and Osaka.

Promotional material handed out to attendees provided detailed information on the merits of investing in Japanese real estate, the purchase process and taxes, as well as information on ‘Abenomics’ and currency markets. With the recent weakening of the Yen, the pamphlet explained that a 30 million Yen apartment that would have cost 2.5 million Yuan in January 2012 could now be bought for 1.765 million Yuan (at January 2014 exchange rates). Note: As of November 24, it is the equivalent of 1.56 million Yuan. 

Major companies right down to small agencies dealing only with Chinese buyers are busy organising property tours in Japan, with bus tours held almost every day.

A representative from a major brokerage said they have seen the number of inquiries jump by 1.5 times over the past 12 months and have attributed the strong interest to the falling Yen. Approximately half of the participants in their tours end up buying a property.

Taiwanese brokerage Sinyi plan to double their presence in Japan next year. They have already sold 20 billion Yen (170 million USD) worth of real estate in the first 10 months of 2014 and are expecting to close 450 deals worth  31 billion Yen in 2015.

An unnamed source in the the Nikkei Asian Review suggested that Taiwanese agencies could sell between 50 ~ 60 billion Yen (423 ~ 508 million USD) worth of Japanese real estate in 2014. This is still a small figure when compared to other destinations for Chinese money, such as the US where Chinese citizens bought 22 billion USD worth of homes in 2014.

What makes Tokyo appealing?