Chinese Investment in Japanese Real Estate Climbs Sharply

Posted: November 9, 2014 in Econ 101, Free Trade

SOURCE: http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20141109000008&cid=1202

SEE ALSO:  China and Japan Sign Over 40 Collaboritive Agreements


Chinese investment in Japanese property climbs sharply

Staff Reporter

2014-11-09

Tokyo in 2011. (File photo/CFP)

Tokyo in 2011. (File photo/CFP)

The total amount of Chinese investment in Japanese commercial real estate has reached US$230 million, three times the investment seen in 2013, due to the Japanese yen’s depreciation and Tokyo winning the bid to host the 2020 Olympic Games.

There are many risks associated with buying houses in Japan, including legal regulations, tax levies, natural disasters and the yen’s depreciation, according to a report on 163.com, a popular Chinese website.

A woman surnamed Deng who lives in Guangzhou and engages in trade said she was surprised by the low housing prices in Japan when she traveled to Tokyo a year ago.

She later bought an apartment through a Hong Kong property agency, with a floor area of 20 square meters in Fukuoka prefecture for over 100,000 yuan (US$16,300), the report said.

The price she paid was for a house situated in a remote area, Deng said, adding that a house in Tokyo normally costs millions of yuan.

Lee Hangbin, the head of a Japanese property agency that operates in Hong Kong and specializes in Japanese real estate, said that since the company was established three years ago, it has seen the highest surge in business this year, with an annual 10% growth in transactions. In September alone, 80 deals were completed, he added.

Lee added that his company’s main clients are Hong Kong residents, with customers from mainland China accounting for about 10% of the total. The extent of investment made by people from the mainland ranges widely from hundreds of thousands of yuan to over 10 million yuan (US$1.63 million), with some even splurging and buying an entire building.

Half of the Chinese investors have bought houses in Japan for investment purposes, while the other half are there for their children’s education or because they prefer life in Japan, according to Lee.

In addition to residential buildings, Japan’s commercial buildings are also considered attractive among Chinese investors. In fact, Chinese investors went on a global property buying spree during the first half of this year.

According to real estate services firm Jones Lang LaSalle (JLL), Chinese investment in property abroad was pegged at US$5.4 billion during the first six months, up 17% year-on-year, with US$4 billion invested in commercial real estate.

Europe, the United States, Australia and Canada have been the most popular destinations for Chinese institutional investors during the past few years, while Japan has become more popular in the last year, the report said.

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