【SCMP Interview】Hong Kong investors are turning to Japan for real estate
- Local investors join others from China in flocking to Japan to buy property, particularly hotels and private lodgings
- Tokyo and Osaka are the main markets of choice, with not even a tough law on home sharing introduced last year, turning off buyers
Tokyo and Osaka have benefited the most from the increasing investment, according to agents. However, Osaka had taken over Tokyo in investments in private lodgings, said Glass Wu, CEO and co-founder of Japan Hana.
Wu said that was because the capital city’s property market had become too hot for some buyers, while Osaka remained cheaper and had fewer restrictions in managing private lodgings under the minpaku law.
Agents generally agreed that managing private lodgings could normally generate better returns than long-term residential rental, the return on which had been stable at around 4 per cent due to Japan’s rent control system. But they also pointed out risks such as the law limiting periods when the services can operate, and additional management and cleaning fees.
【Hong Kong Property affordability】
However, the wait is likely to last, as the city’s shortage of land may still keep the market going. Two major measures to increase land supply, including 1,000 hectares of artificial islands off Lantau Island and a plan for the government to co-develop farmland with private developers who own the sites, have recently met with delays due to the political turmoil over the extradition bill.
The two measures were expected to see progress last month, but amid numerous protests, marches and non-cooperative movements, the government has pushed the plans back with an uncertain timetable for the projects.
Developers had earlier raised fears that the government might not be able to roll out enough sites for sale next year.
This article appeared in the South China Morning Post print edition as: Soaring flat prices and trade war drive investors to Japan