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

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"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 scale 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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24 Comments
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Not unlike all those Japanese investors buying up US real estate and companies in the 80's.

4 ( +9 / -5 )

The more real estate bought by Chinese investors AKA "Chinese government," the more Chinese people will be sent to Japan for espionage and other nefarious purposes. It is easy to export people if they have a place to stay and job. Real estate can provide both of those things.

10 ( +14 / -4 )

This reminds me of when a Japanese consortium bought a disused church in my area,and shipped it stone by stone back to Japan.

Imagine the touristic charm of a Saitama apartment block!

4 ( +6 / -2 )

The main motivation of most Chinese who visit Japan is in search of business opportunities.

Chancers all! Until the ineluctable logic of what happens when irresistible force meets immovable object intervenes and things go all pear shaped.

0 ( +1 / -1 )

There's a thought.....China should just buy out their geo-political rivals, instead of going to war. It would be cheaper than war, and a lot more humane.

3 ( +4 / -1 )

The more real estate bought by Chinese investors AKA "Chinese government," the more Chinese people will be sent to Japan for espionage and other nefarious purposes. 

These are not government agents. These are wealthy Chinese fleeing the jaws of the CCP. They all saw what happened to Jack Ma and realize their wealth is not secure in China. They will be a positive addition to Japan as most bring with them considerable wealth and entrepreneurial spirit.

5 ( +6 / -1 )

If they are truly interested in investment, then they would buy J-Reits, which are about a million times less of a hassle than owning physical property in a foreign country.

These people are motivated by social or political reasons, regardless of what they say. I thought mainlanders are limited by Chinese law to take no more than $50.000 a year out of the country. The funds appear to be dirty money, in many cases.

8 ( +8 / -0 )

The funds appear to be dirty money, in many cases.

The Chinese government calls any money they can't confiscate for their own criminal purposes "dirty money." Can't blame Chinese for wanting to place whatever they can out of the reach of the CCP, which will take it all sooner or later.

0 ( +3 / -3 )

These are not government agents. These are wealthy Chinese fleeing the jaws of the CCP. They all saw what happened to Jack Ma and realize their wealth is not secure in China. They will be a positive addition to Japan as most bring with them considerable wealth and entrepreneurial spirit.

@Desert tortoise.......that is true, but the Chinese are now limited on how much wealth Chinese can invest outside the country each year. You will not see rich Chinese coming in and buying vineyards like back in the day unless they get direct permission from the CCP. Usually those individuals are friends or family members of government officials which means they get a piece, too!

Large purchases outside the situation described above are mostly government plans to help send workers abroad to bring revenue back to China and keep an eye on them at the same time.

With residential and commercial real estate, the CCP can set up businesses and provide housing. Those same locations can also be cover for espionage activity.

Report: China’s unofficial ‘police stations’ operating under the radar in London, other parts of the world

> https://news.yahoo.com/report-china-unofficial-police-stations-225148709.html?fr=sycsrp_catchall

China has opened up its latest secret "overseas police service centers" in Chinese restaurants and shops throughout the United Kingdom and other China towns around the world. (Real estate!)

That means Europe, the Americas, Asia (Japan), and Africa.

The Chinese Communist Party runs 54 police centers outside of China, 36 in Europe alone. One of the two in London claims to be a real estate company, while one in Glasgow operates in a Chinese restaurant.

Yokohama and Ikebukuro looks a whole lot different knowing those details.

8 ( +8 / -0 )

China has opened up its latest secret "overseas police service centers" in Chinese restaurants and shops throughout the United Kingdom and other China towns around the world. (Real estate!)

The CCP is all about surveillance of its people. It is even more important abroad. They want to be able to monitor where Chinese people reside. People feel more comfortable in more no professional type environments.

Most foreign communities tend to gravitate around certain areas like markets and restaurants to be around their own culture to speak their language and see people who look like them. That is where the CCP will be able to see what Chinese people really think and feel.

The CCP owning real estate is all about surveillance and control. China does the same thing to college students abroad.

Would also caution about spies living near military bases. I use to work in Japan. Every year, this middle-aged Chinese woman got a vendor licenses to travel all-year around Japan to all the military bases selling paintings. The vendor areas is usually in the entrance where everybody comes in to go to the commissary and restaurants, etc. I worked there for 4 years. I think she sold one or two paintings those 4 years.

Now, from a business standpoint, it does not seem rational to do all that traveling to sell low price paintings that are not very popular.

If I was a betting man, I would guess a little of that "business" was reconnaissance.

10 ( +10 / -0 )

Housing markets are preferred destinations for foreign investors looking for yields, vacation homes or safe havens, or for those dodging tax restraints and for the Russians and the Chinese corruption crackdowns in their home countries. But demand for real estate from foreign investors, especially Chinese, pushes up prices, exacerbating concerns over housing affordability.

3 ( +3 / -0 )

A fellow I worked with sold his house to a Chinese buyer. When the deal closed, the buyer paid up with cash in a suitcase. Not something that normally happens.....

5 ( +6 / -1 )

If they are truly interested in investment, then they would buy J-Reits, which are about a million times less of a hassle than owning physical property in a foreign country.

It is a different mindset for them. In China all urban land is owned by the central government and all farmland is owned by agricultural communes. Any other no urban land that is not part of a commune is also state owned. There is no private land ownership. It is illegal. Wealthy Chinese want a piece of actual land to call their own and, perhaps more importantly, to be able to pass this land to their children. This is a huge big deal for them.

1 ( +2 / -1 )

@Desert tortoise.......that is true, but the Chinese are now limited on how much wealth Chinese can invest outside the country each year. You will not see rich Chinese coming in and buying vineyards like back in the day unless they get direct permission from the CCP. 

They get around those restrictions pretty much the same way drug cartels launder money through Chinese banks. If you are a wealthy Chinese business person with business dealings abroad there are multiple ways to move money out of China to the US or Japan.

1 ( +2 / -1 )

Would also caution about spies living near military bases. I use to work in Japan. Every year, this middle-aged Chinese woman got a vendor licenses to travel all-year around Japan to all the military bases selling paintings. The vendor areas is usually in the entrance where everybody comes in to go to the commissary and restaurants, etc. I worked there for 4 years. I think she sold one or two paintings those 4 years.

I would be pretty sure the military knows these people and what, if anything, they are up to. We used to get annual counter-intel briefs when I was on active duty and you would be amazed what the security people know. They are not dummies. I'll leave it at that.

5 ( +6 / -1 )

Housing markets are preferred destinations for foreign investors looking for yields, vacation homes or safe havens, or for those dodging tax restraints and for the Russians and the Chinese corruption crackdowns in their home countries. But demand for real estate from foreign investors, especially Chinese, pushes up prices, exacerbating concerns over housing affordability.

That has certainly been the case in San Jose and parts of the San Gabriel Valley. Chinese, Russians and Indians, often their smartest people too.

2 ( +3 / -1 )

Not just Chinese, Vietnamese in Japan is recently becoming the second largest foreign population. They're also buying assets and creating their own autonomous regions within Japan.

If you ever have an opportunity to go into the Southern states of the US (from Texas to Mississippi), Vietnamese American communities are carving up their closed communities being impervious to externalities, while they greatly contribute to the local economy. The same story is also seen in Southern California with Little Saigon. Chinese and Vietnamese people share the same mentality of creating autonomous communities everywhere that they go.

For Japan, this is a good thing as talented Asian foreigners can revitalize Japan. For Japanese natives, it is horrible because their jobs will be mostly taken by these foreigners. Hence, this is why the ongoing hatred against Vietnamese in Japan is on the rise because all jobs are taken from Japanese natives.

-4 ( +1 / -5 )

A fellow I worked with sold his house to a Chinese buyer. When the deal closed, the buyer paid up with cash in a suitcase. Not something that normally happens.....

I have bought properties and paid cash, but in every case brought a cashier's check to the title company, not to the seller. Just from my experience I have a hard time imagining someone paying cash in bills in a title office. They don't have facilities to handle cash.

1 ( +1 / -0 )

@Septim Dynasty, what you describe is no different from almost every other immigrant group to come to the US where they formed tight knit ethnic communities, little Italy's, little Poland's, etc. The upper Midwest was settled by Norwegians, Swedes and Germans. Cities in the northeast had big Italian communities where one never had to speak a word of English to live comfortably. Early Japanese Americans had their own communities too and were prominent in agriculture but many Japanese American communities were effectively dismantled by WWII internment. Even today places like Glendale California in places feel more like Armenia than the US with Armenian signage on stores and Armenian language media including TV stations. By the third generation everyone is pretty much Americanized.

1 ( +2 / -1 )

Hi Desert Tortoise,

I am only repeating what my co-worker told me. He was very explicit when he said that the man brought in a suitcase of cash.

I, too, live and grew up in California. I quite enjoy the multiculturalism of this area. On just the block where I live we have had Japanese Americans, Vietnamese, Koreans, Iranians, a Swede, a Norwegian, Mexicans, a French, and Lord knows what else. Among the old timers are lots of Midwesterners.

2 ( +2 / -0 )

I forgot about the Ecuadoran.

2 ( +2 / -0 )

There goes the neighborhood.

1 ( +1 / -0 )

Especially those around military bases, and since overseas Chinese all have their families (in China) held hostage by the CPP, they will have to comply when their houses is "required" by the CPP.

0 ( +0 / -0 )

If there is a problem with ‘security’ then Japan just needs to stop selling as other countries have done or never do…

0 ( +0 / -0 )

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