In recent years, investment in Japanese real estate bywealthy Chinese has been expanding rapidly.
Behind the interest of Chinese investors in the Japanese real estate market are stable investment yields, a transparent legal system, and a sense of affordability due to the weak yen.
In this article, we will explain in detail the five reasons why wealthy Chinese arecontinuing to buy Japanese real estate and the areas and property types that are popular investment targets. As an expert in the real estate industry, I will also provide the latest information on legal restrictions on foreign real estate purchases and immigration using a business management visa.
The Reality of Japanese Real Estate Investment by High Net Worth Chinese
Expansion of Investment Scale as Seen in Data
The scale of Chinese real estate investment is often described as expanding, but no official statistics tabulate acquisitions by nationality, since real estate registration records do not capture a buyer's nationality. What public data does show is the share of purchases made by buyers with an overseas address, and those figures are set out in the next section.
No official statistics break down purchase price ranges or payment methods by nationality. What is publicly available is the Ministry of Land, Infrastructure, Transport and Tourism's survey of new condominium transactions, published November 25, 2025, which found no clear tendency for buyers with an overseas address to be actively purchasing properties above 200 million yen in Tokyo's central six wards. Anecdotes of properties in the 300-500 million yen range being purchased in cash lump sums do circulate in the industry, but these reflect individual brokers' impressions rather than a market-wide trend backed by published data.
Investor Attributes and Investment Motivations
An analysis of the demographics of Chinese investors reveals that they are primarily from the ultra-high-net-worth class. These investors have a long-term investment strategy with a view to immigration, not merely for asset management purposes.
The need to immigrate by obtaining a business management visa has often been cited as well, but the requirements for this residence status were substantially tightened under a reform that took effect on October 16, 2025. Previously, applicants needed only one of the following: capital or total investment of at least 5 million yen, or the employment of two or more full-time staff. Under the new rules, applicants must meet both a capital requirement of at least 30 million yen and the employment of at least one full-time staff member, in addition to Japanese-language ability, educational or work-history requirements, and a business plan reviewed by a qualified professional (details below).
Numbers the Public Statistics Do Confirm — and What They Don't
This topic tends to get discussed through impressions rather than data. Below are the figures that government agencies have actually published, along with a note on what those figures cannot tell us.
The Share of New Condominiums Bought by Overseas Buyers (MLIT)
On November 25, 2025, Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT) published an analysis of roughly 550,000 newly built condominiums in the three major metropolitan areas and four regional core cities, based on registry data and private-sector pricing data covering registrations from January 2018 through June 2025. The share of units acquired by buyers with an address overseas was as follows:
| Area | Peak, 2018-2023 | 2024 | Jan-Jun 2025 |
|---|---|---|---|
| Greater Tokyo | 1.2% (2018) | 1.0% | 1.9% |
| Tokyo Metropolis | 1.8% (2018) | 1.5% | 3.0% |
| Tokyo's 23 wards | 2.0% (2018) | 1.6% | 3.5% |
| Central six wards | 5.3% (2018) | 3.2% | 7.5% |
| Osaka Prefecture | 2.7% (2023) | 3.9% | 2.6% |
| Kyoto Prefecture | 1.3% (2023) | 3.1% | 2.3% |
"Central six wards" refers to Chiyoda, Chuo, Minato, Shinjuku, Bunkyo, and Shibuya. The recent uptick is real, and the share is indeed higher toward the city center — but even in the first half of 2025, buyers with an overseas address still accounted for only 3.5% of all purchases across the 23 wards, a far smaller figure than the impression left by media coverage of the central-ward numbers alone.
The same survey also examined price segments, and MLIT's own press release states plainly that "no clear tendency was observed for buyers with an overseas address to be actively purchasing properties priced at 200 million yen or above" in the central six wards. The rate of short-term resale (a transfer registration within one year of the initial registration) was 9.3% across the 23 wards and 12.2% in the central six wards for the first half of 2024 — elevated, but not the "flip everything for cash" pattern sometimes assumed.
What the Survey Cannot Tell Us
What this survey captures is "buyers with an address overseas" — not "Chinese nationals." MLIT notes explicitly that its registry data contains no nationality field, and that it has no way to capture purchases made by foreign nationals who are already resident in Japan. In other words, there is no official statistic measuring what percentage of new condominiums are bought by Chinese nationals specifically. Any figure claiming otherwise should prompt the question of what, exactly, it is counting — and readers used to U.S. real estate data will recognize the gap: it is the same limitation as the NAR's foreign-buyer survey, which relies on voluntary broker responses rather than a nationality field in the deed record.
Forest Land Acquisitions (Forestry Agency)
Reports that "land in Hokkaido is being bought up" often trace back to an annual survey published by the Ministry of Agriculture, Forestry and Fisheries' Forestry Agency. According to results released on September 16, 2025, foreign corporations and others acquired 382 hectares of forest land in 2024 — just 0.003% of Japan's 14,311,347 hectares of privately owned forest. Of that, 171 hectares were acquired by parties believed to be foreign individuals or corporations based overseas, and 211 hectares by parties believed to be foreign-affiliated companies based in Japan. The cumulative total since 2006 stands at 10,396 hectares, or 0.07% of all private forest land. For comparison, the same report notes that foreign ownership of forest land in the United States runs at roughly 5.0% — meaning Japan's foreign-held share of forest land is, by this measure, considerably lower than in the U.S., not higher.
Registered Foreign Residents (Immigration Services Agency)
As of the end of 2025, the number of registered foreign residents in Japan reached 4,125,395 — up 356,418, or 9.5%, from a year earlier, and surpassing 4 million for the first time. By nationality, China ranked first with 930,428 residents (up 57,142), or roughly 22.6% of the total, followed by Vietnam (681,100) and South Korea (407,341).
Owning property and holding residence status are two different things, but the growing resident population is a reminder that investment purchases and purchases tied to actual residence need to be considered separately — a distinction that also determines, as covered further below, whether Japanese withholding tax applies to rent and to sale proceeds.
Five reasons why Japanese real estate is chosen
1) Attractiveness of Permanent Ownership
One of the biggest reasons why wealthy Chinese choose Japanese real estate is because of its permanent ownership. In China, land is state-owned, and individuals can only own buildings, and the right to use land is limited to 70 years. In Japan, on the other hand, permanent ownership is available for both land and buildings.
This difference is extremely important from an asset preservation perspective. Since Japanese real estate remains in perpetuity, it is possible to pass on assets from one generation to the next. For Chinese investors, this permanent ownership is more than just an investment, but is positioned as an asset base for the future of the family.
| Comparison Items | China | Japan |
|---|---|---|
| Land ownership | State-owned (70-year usufructuary right) | Permanent ownership |
| Building ownership | Private ownership possible | Permanent ownership |
| Inheritance | Succession of usufruct | Complete ownership succession |
| Asset value | Depreciation due to expiration of use | Permanence of land value |
(2) Profitability through high investment yields
In terms of investment yields, Japanese real estate has a clear advantage over Chinese real estate. While the average yield on real estate investments in China's major metropolitan areas is only around 2%, yields of around 3.5% to 4% can be expected in Tokyo.
This yield differential offers attractive investment opportunities for Chinese investors. In particular, considering that yields in major Chinese cities such as Beijing and Shanghai are approximately less than 2%, Japanese properties are expected to yield around 3.5-4%, making them extremely attractive as a source of stable income.
With a focus on yields of around 3-4% from annual rental income, single-building income-generating properties are particularly popular. This stable profitability is in line with the long-term asset management strategies of wealthy Chinese.
(iii) Undervalued prices and the effect of the weak yen
Japan's advantage is also clear in real estate price comparisons.
More importantly, Japanese real estate prices include land rights. In China, the price is for the building only, whereas in Japan, the price includes the land rights, making the real undervaluation more pronounced.
The depreciation of the yen is also a tailwind for Chinese investors. The advantages of the exchange rate have led to a relative decline in investment costs on a yuan basis, increasing the appeal of investment.
4) Transparent and stable legal system
The transparency and stability of the Japanese legal system is a source of great comfort for foreign investors. Currently, there are few legal restrictions on foreign real estate purchases in Japan, and foreigners can purchase real estate and acquire full ownership under the same conditions as Japanese nationals.
As of April 2024, when a Japanese person residing abroad, a foreigner not domiciled in Japan, or a foreign corporation becomes the owner of real estate, contact information in Japan has become a registered matter, but this is a measure to increase transparency and does not restrict the purchase.
The highly transparent trading system allows Chinese investors to invest with confidence. Combined with political and economic stability, it is highly regarded as a long-term investment environment.
5) Geographic and cultural affinity
Geographical proximity provides practical advantages for Chinese high net worth individuals. Travel time from China to Japan is short, allowing for frequent travel to and from Japan. This is an important factor for use as a second home or as an educational center for their children.
Cultural similarities are another factor that cannot be overlooked. Being from a culture where Chinese characters are used, it is relatively easy to understand Japanese culture and customs, and to adapt smoothly to the living environment.
The quality of the educational environment is another reason for wealthy Chinese to choose Japan. A high-quality education system and a safe social environment are attractive factors for wealthy Chinese who value the education of their children. Increasingly, penthouses in luxury condominiums are being used as educational centers for their children in units over 120 square meters in size.
Popular Real Estate Areas and Property Types for Investment
Most Popular Investment Areas among High Net Worth Individuals in China
The most popular property areas among wealthy Chinese are prime central Tokyo locations in the 23 wards of Tokyo. Industry accounts sometimes describe cash purchases in the 300-500 million yen range as especially active in premium areas such as Minato-ku, Shibuya-ku, and Chiyoda-ku, but no published nationality-based data confirms that pattern; what is better documented is that these areas are consistently chosen for their cosmopolitan environment, excellent accessibility, and stable asset values.
| Area | Characteristics | Average Purchase Price Range | Reasons for popularity |
|---|---|---|---|
| Minato-ku (Akasaka, Roppongi, Aoyama) | International flavor, good accessibility | 300-500 million yen | Rich foreign community, convenient as a business base |
| Shibuya Ward (Hiroo, Ebisu, Daikanyama) | High-class residential area, good cultural facilities | 200-400 million yen | Sophisticated living environment, proximity to educational facilities |
| Chiyoda Ward (Bancho, Kasumigaseki area) | Political and economic center | 300-600 million yen | Status as a top-class residential area, rarity of proximity to the Imperial Palace |
| Chuo Ward (Ginza, Tsukishima) | Commercial and financial center | 200-400 million yen | Stability of investment value, access to central Tokyo |
Minato-ku is particularly popular among Chinese investors, and the Akasaka, Roppongi, and Aoyama areas are valued for their international environment and excellent accessibility. With a strong foreign community and convenient access to business centers, these areas are ideal locations for investors looking to relocate.
The Hiroo, Ebisu, and Daikanyama areas of Shibuya Ward offer the dignity of an upscale residential area and a wealth of cultural facilities. The sophisticated living environment and proximity to educational facilities are attracting an increasing number of wealthy Chinese who are using these areas as educational centers for their children.
Investment Trends by Property Type
There is a clear trend in property selection by Chinese investors. For investment purposes, single-building income-producing properties are particularly popular, with an emphasis on yields of around 3-4% from annual rental income.
In penthouses of luxury condominiums, wide-scale units of over 120 square meters are preferred. These properties are often used as "second homes" or as educational centers for children, and the quality of residence is an important selection.
Tower condominiums are another popular property type among wealthy Chinese. As luxury properties in prime locations in central Tokyo, they combine value as status symbols with practicality. In particular, properties on the upper floors with good views are actively purchased, even at premium prices.
Office and commercial buildings close to train stations are also attracting attention as investment targets. These properties can be expected to generate stable rental income and are in line with the income-oriented investment strategies of Chinese investors.
Investment Trends and Characteristics by Region
In Osaka City, investment is increasing mainly in the Chuo and Naniwa wards. Investments in anticipation of the Expo and IR plans are on the rise. Lump-sum purchases for high-value properties are on the rise, indicating growing interest in the Kansai region by Chinese investors.
Condominiums in the bay area have also traditionally been popular with Chinese investors, and are attracting attention because the timing coincides with the lifting of travel restrictions from China to Japan. These areas combine future development potential with current affordability and are considered attractive from a long-term investment perspective.
In local cities, investments in high-end resort properties in tourist areas and hot spring resorts are also seen. These investments are mainly for the purpose of operating second homes or private accommodations, and in some cases, they are used as businesses that satisfy the requirements for obtaining a business management visa.
October 2025: The Requirements for the "Business Manager" Visa Changed Significantly
Any discussion that pairs real estate investment with relocation to Japan inevitably raises the "Business Manager" residence status. This is an area where the requirements were substantially raised by a reform to the landing-permission ministerial ordinance that took effect on October 16, 2025 — meaning explanations written before that date are no longer accurate. The changes announced by Japan's Immigration Services Agency are summarized below.
| Item | Before the reform | After the reform (effective October 16, 2025) |
|---|---|---|
| Capital | Capital or total investment of at least 5 million yen, or employment of two or more full-time staff (either one) | Capital or total investment of at least 30 million yen |
| Full-time staff | One of the two options above | At least one full-time staff member is now mandatory, and must be a Japanese national, a special permanent resident, a permanent resident, or the spouse of a Japanese national, spouse of a permanent resident, or a long-term resident — foreign nationals on a work-based status of residence do not count toward this requirement |
| Japanese ability | No requirement | Applicant or a full-time staff member must have Japanese ability at CEFR level B2 or above (confirmed via JLPT N2 or higher, a BJT Business Japanese Proficiency Test score of 400 or above, graduation from a Japanese university, and similar measures) |
| Education / experience | Three years' work experience (one year if a related master's degree was completed) | A doctoral, master's, or professional degree in business administration or a field relevant to the business, or at least three years' experience in business management or administration |
| Business plan | Submission only | Must be reviewed and confirmed by a certified SME management consultant, certified public accountant, or licensed tax accountant |
| Business premises | Premises required | Premises appropriate to the larger scale required under the reform; a home address generally cannot double as business premises |
Several operational points accompany the reform:
- If day-to-day management is outsourced to the point that there is no genuine evidence of managerial activity, the applicant will not be treated as engaged in "Business Manager" activity. Residence status cannot rest on handing operations entirely to a third-party manager, which rules out the once-common pitch of buying a rental unit or running it purely through a management company as a path to this status.
- Renewal reviews will check compliance with labor and social insurance obligations, and payment of withholding tax, corporate tax, consumption tax, and local corporate and business taxes.
- Extended, unexplained absences from Japan during the period of residence will be treated as evidence of no genuine business activity, and renewal will not be granted on that basis.
- After the effective date, permanent residency cannot be granted based on "Business Manager" status unless the applicant meets the post-reform standard.
- Those already holding "Business Manager" status as of the effective date have a transitional allowance: for renewal applications filed before the date three years after the reform (October 16, 2028), approval may still be granted based on business performance and the likelihood of meeting the new standard, even where the new criteria are not yet fully met. Renewals filed after that date must meet the new criteria in full.
The practical implication is straightforward: the pitch that "buying real estate and running a short-term rental is enough to qualify for a residence status" no longer holds under the current rules. An applicant must now satisfy five conditions at once — 30 million yen in capital, one Japanese-affiliated full-time employee, B2-level Japanese ability, a professionally reviewed business plan, and dedicated business premises — so this residence status is no longer something that comes along incidentally with an investment. It matters for property owners too: where a foreign business operator is the tenant on a commercial lease, whether that tenant's residence status can be renewed now has a much more direct bearing on the continuity of the rent.
Summary: Impact of Real Estate Investment by High Net Worth Chinese on the Japanese Market
Investment in Japanese real estate bywealthy Chinese is rapidly expanding due to stable investment yields, permanent ownership, and a sense of affordability due to the weak yen, with continued interest in premium areas of Tokyo real estate such as Minato, Shibuya, and Chiyoda wards. Claims that these purchases are concentrated in the 300-500 million yen range and settled almost entirely in cash are not supported by any nationality-based government statistics.
This investment trend is having a multifaceted impact on the Japanese real estate market. One contribution to market activation has been an increase in the liquidity of high-value properties and the volume of transactions.
On the other hand, the impact on price appreciation cannot be ignored. The market is overheated, with the average price of new condominiums in Tokyo's 23 wards exceeding 110 million yen for the second year in a row, and one factor supporting this price surge is purchases by foreign investors.
The number of investors who are simultaneously investing in real estate and immigrating to Japan is increasing, as is the need for immigration using business management visas. There have been cases where business development through the operation of private accommodations has fulfilled the requirements for obtaining a "business management visa," and a combined need for investment and immigration is becoming apparent.
As for the future outlook, although free investment is possible due to the current lack of restrictions on real estate purchases, there is a possibility that tighter regulations will be considered from a security perspective, and changes in policy are expected, such as the "Foreigners' Land Acquisition Regulation Bill" submitted to the House of Representatives in December 2024, and the Ministry of Land, Infrastructure, Transport and Tourism's first survey of actual conditions. The real estate industry is expected to continue to make progress in light of these developments.
In light of these trends, it is important for the real estate industry to provide services that meet the needs of Chinese investors and to establish an appropriate compliance system. We will continue to provide support for sustainable real estate investment as a trusted partner to high net worth individuals in China.
If you are considering investing in Chinese real estate, we recommend that you consult with a trusted professional regarding legal restrictions, tax considerations, requirements for obtaining a business management visa, and other areas requiring specialized knowledge.
What It Actually Takes for a Foreign National or Foreign Corporation to Hold Japanese Real Estate
It is accurate to say there is no legal restriction on foreigners buying real estate in Japan — but being able to buy is different from there being no procedures at all. Legal procedures apply at acquisition, during ownership, and at sale, and some of these create obligations for real estate businesses as well, not just for the buyer.
Advance Notification Under the Important Land Survey Act
Under a 2021 law (formally, the Act on the Review and Regulation of the Use of Real Property Surrounding Important Facilities and on Remote Border Islands), the Prime Minister designates the area within roughly 1,000 meters of important facilities such as defense installations, as well as remote border islands, as "Watch Areas," and areas of particularly high importance within them as "Special Watch Areas."
For land or buildings within a Special Watch Area with a floor area of 200 square meters or more (calculated per building as the total floor area across all stories), both the buyer and the seller must notify the Prime Minister in advance before entering into a contract to transfer or create ownership or an ownership-related right. The threshold is assessed per parcel for land and per building for structures. The rule applies regardless of nationality, but because the designated areas cluster around Self-Defense Force bases and nuclear-related facilities, it does come up in practice in regional land transactions. The designated areas are published by prefecture on the Cabinet Office's website.
Rent Paid to a Non-Resident Owner Is Subject to Withholding Tax
This is the point that matters most in day-to-day practice for property managers and brokers. Anyone paying rent for Japanese real estate to a non-resident individual or a foreign corporation must withhold 20.42% for income tax and the special reconstruction income tax, and remit it to the tax authorities (under the Income Tax Act, Articles 161 and 212, among other provisions). The obligation falls on the party paying the rent, not the one receiving it.
An exception applies when an individual leases the property for their own residential use or that of a family member, in which case withholding is not required (Order for Enforcement of the Income Tax Act, Article 328). Put the other way around: when a corporation leases the unit as employee housing, or when a management company collects and remits rent on the owner's behalf, withholding is generally required. If an owner relocates overseas and the payer keeps remitting the full amount without recognizing the change, the payer can face a back-tax assessment later — a risk that Japan-based readers will recognize as broadly analogous to FIRPTA withholding on U.S. real property sales by foreign owners, though the Japanese rules apply to ongoing rental income as well as to a sale.
A similar mechanism applies on sale. When land is purchased from a non-resident, the buyer must withhold 10.21% of the transfer proceeds. An exception applies where an individual purchases the property for their own residential use or that of a family member and the transfer price is 100 million yen or less.
| Situation | Who withholds | Rate | When not required |
|---|---|---|---|
| Rent paid for domestic real estate owned by a non-resident | The party paying the rent | 20.42% | When an individual leases the property for their own or a family member's residential use |
| Purchase of land from a non-resident | The buyer | 10.21% | When an individual buys for their own or a family member's residential use and the price is 100 million yen or less |
A Domestic Contact Address Is Now Part of the Registration
As mentioned earlier, since April 2024 an owner without a domestic address must register a contact address in Japan. In practice, what matters is whether that contact actually functions — whether the named person can make decisions on repairs or handle tax obligations when the owner cannot be reached quickly. It is a point worth confirming with the owner before taking on a property management assignment, rather than assuming the registered address alone solves the problem.
Frequently Asked Questions
Q1: Are there any legal restrictions on foreigners purchasing real estate in Japan?
Currently, there are no legal restrictions on foreigners purchasing real estate in Japan. Foreign nationals can purchase real estate and obtain full ownership under the same conditions as Japanese nationals. Purchases are possible regardless of nationality, visa type, or permanent residency status.
However, as of April 2024, if a Japanese person residing abroad, a foreigner who does not have a domicile in Japan, or a foreign corporation becomes the owner of the real estate, contact information in Japan will be required for registration. In addition, from a security perspective, the possibility that regulations may be introduced in the future is being discussed.
Q2: What are the restrictions on remittances from China?
In China, international remittances by individuals are limited to the equivalent of $50,000 per year. For high value real estate purchases, it is necessary to send remittances over multiple years or utilize multiple channels. In addition, RMB cannot be remitted directly; it must be converted into a foreign currency before remittance.
Due to these restrictions, wealthy Chinese who purchase high-value properties will need to utilize multiple remittance routes or transfer funds over multiple years. We recommend that you consult with a specialist regarding the appropriate remittance procedures.
Q3: What are the requirements for obtaining a Business Management Visa?
Under a reform that took effect on October 16, 2025, applicants must now satisfy all of the following requirements together (previously, meeting either a capital of at least 5 million yen or the employment of two or more full-time staff was sufficient).
1. Capital or total investment of at least 30 million yen
2. Employment of at least one full-time staff member (limited to Japanese nationals, special permanent residents, permanent residents, spouses of Japanese nationals, spouses of permanent residents, or long-term residents)
3. Japanese-language ability at CEFR level B2 or above, held by either the applicant or the full-time staff member (confirmed via the Japanese Language Proficiency Test N2 or higher, a BJT Business Japanese Proficiency Test score of 400 or above, graduation from a Japanese university, and similar measures)
4. A doctoral, master's, or professional degree in business administration or a field relevant to the business, or at least three years of work experience in business management or administration
5. A business plan reviewed and confirmed by a certified SME management consultant, certified public accountant, or licensed tax accountant
In addition, because business premises must now be scaled to the size of the operation, a home address generally cannot double as the business premises, and outsourcing day-to-day operations to the point where there is no genuine managerial activity will disqualify an applicant. Those already holding "Business Manager" status have a transitional allowance for renewal applications filed before the three-year mark after the reform took effect (October 16, 2028).
Q4: What is the expected yield for real estate investment in Japan?
In Tokyo and other major metropolitan areas, an average yield of around 3.5% to 4% can be expected. This is a high level compared to about 2% in major cities in China. In some regional cities, even higher yields can be expected.
Chinese investors are evaluating the stable profitability of income-producing properties purchased in single-building, which are managed with an emphasis on yields of around 3-4% based on annual rental income. However, yields vary depending on the location, property type, and management conditions, so detailed examination of individual properties is necessary.
Q5: What areas and property types are popular among Chinese investors?
Minato-ku (Roppongi and Akasaka), Shibuya-ku (Hiroo and Ebisu), and Chiyoda-ku (Bancho) are popular among wealthy Chinese investors. Penthouses over 120 square meters and income-producing single-family properties are the most preferred property types, with budgets in the 300-500 million yen range.
These areas combine a cosmopolitan environment, excellent access, and the dignity of an upscale residential area, and are often used as second homes or educational centers for children. High-rise tower condominiums are also popular because of their value as status symbols and practicality.
