One of the biggest property brokerage firms in Taiwan is helping Taiwanese and Chinese buyers find property investments in Japan, as the government restrictions are making it increasingly difficult to buy in their home markets. Japan is proving attractive due to low interest rates, and the high rental yields can be double those available in their home countries.
Property prices in Japan are currently low, while the Chinese and Taiwanese governments are currently trying to suppress property prices are due to their rapid increase over the last couple of years. China has already raised interest rates five times since October, has limited property purchases in Beijing and Shanghai and is now looking towards curbing the growth of property prices in smaller cities.
Taiwan has increased the cost of borrowing for five straight quarters, and has also introduced a new tax on luxury properties sold within two years of purchase. It's been estimated that this action will lower transaction volumes by 10% this year as the market is no longer so attractive to speculators.
The property market in Japan is already showing signs of recovery after the recent earthquake and tsunami. New housing starts increased by 6.4% in May compared to a year earlier, and a $25.5 billion disaster package has just been approved for rebuilding after the earthquake. Rental yields in the country are around 5% to 6%, which is double that of China or Taiwan, as property prices here haven't increased as substantially as other Asian markets. Chinese investors in particular are increasingly looking for other markets, as they prefer to relocate assets offshore.
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