Japan’s real estate market is experiencing an unexpected boom as international investors shift their focus away from China’s struggling property sector. Fresh data reveals that foreign capital inflows into Japanese residential properties surged to $11.2 billion in early 2024, outpacing historical averages and positioning the country as a top global investment destination.
The trend is particularly noticeable among investors from Hong Kong, Singapore, and the U.S., who have been leading the charge. Even mainland Chinese buyers, traditionally anchored to domestic markets, have doubled their usual investments in Japan, injecting $1 billion in just three months. Analysts attribute this shift to Japan’s stable market conditions and the yen’s depreciation, which enhances affordability for foreign buyers.
Colliers Japan highlights that Hong Kong investors, in particular, are pivoting toward Japan and Australia after years of prioritizing China. The multifamily housing sector in these countries offers liquidity and scale, making them attractive alternatives amid China’s prolonged real estate downturn. Meanwhile, Japan’s residential sector saw a 16% year-on-year increase in investment, signaling growing confidence in its long-term stability.
The weakening yen, down 9% against the dollar over the past year, has further fueled foreign interest. Although inflation remains elevated, the currency’s decline has effectively lowered entry costs for overseas buyers. As China’s property crisis persists, Japan’s real estate market appears poised to benefit from sustained capital inflows in the foreseeable future.