Policies aimed at easing their real-estate markets is prompting Chinese and Taiwanese investors to look to Japan where low interest rates and rental income provide yields that are twice those available at home, said Jeremy Shiue, president of Taipei-based Sinyi.
“Japan property prices are at a low while China and Taiwan are currently trying to suppress home prices, so capital in those places is looking for an exit,” Shiue said in an interview. “We tell our customers not to invest in Chinese property in the next year.”
China, which this month raised interest rates for the fifth time since October, expanded efforts to curb the growth in residential prices to smaller cities after limiting home purchases in Beijing and Shanghai. Taiwan increased borrowing costs for a fifth straight quarter last month and introduced a luxury duty if properties are sold within two years of purchase.
Taiwan’s transaction volume will likely drop 10 percent this year after the luxury tax “kicked speculators out of the market,” Shiue said. Sinyi, which opened its first branch in Japan last year, expects its own sales in that market to double, helped by Chinese investors looking for new places to put funds.
“Taiwan has a special role between China and Japan,” said Shiue. “We can serve as a bridge between Japan and China.”
Sinyi, which gets 90 percent of its revenue from its 350 branches in Taiwan, posted a record NT$2 billion ($69 million) net income last year, helped by lowest interest rates ever and an inflow of funds from overseas. In China, its 81 Sinyi and 139 Coldwell Banker Corp. outlets contributed 10 percent of its sales last year, Shiue said.
Japan’s market is showing signs of a pickup after the March 11 magnitude-9 earthquake and tsunami. Housing starts rose 6.4 in May as construction companies broke ground on more homes than a year earlier, a land ministry report showed.
Japan’s Diet yesterday approved a 2 trillion yen ($25.5 billion) disaster package to rebuild after the record quake. Rental yields of 5 percent to 6 percent are double those in Taiwan or China because property prices in the country haven’t climbed as much as in other Asian markets, Shiue said.
Chinese investors “see a risk in saving all their money in China, so they want to relocate assets offshore,” Shiue said. “In Chinese, there’s a saying: ‘A smart rabbit has three dens.’”
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